Those who follow Vancouver housing trends even on a casual basis likely never thought they’d see the day when homebuyers wrested control of the market away from home sellers.
Of course, you probably know that all markets ebb and flow — or boom and bust — naturally and Vancouver housing should be no different. But with the media frenzy around soaring prices and double-digit gains seen in 2015 and 2016, you could be forgiven for thinking such market dynamics would play out elsewhere in the Canadian market while staying far away from the country’s west coast.
It has happened though. The Vancouver housing market may not have spectacularly collapsed as some predicted, but it has come back down to earth. It’s homebuyers who are now steering the market, not sellers.
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“Buyers are in control in the detached market. Sellers have had to embrace the new market reality to get deals done,” says Randy Ryalls, general manager, Royal LePage Sterling Realty, in a media release accompanying the latest quarterly national home price data from Royal LePage.
“As the housing market stabilizes, we’ve seen an increasing number of homebuyers become willing to enter the market. We expect activity to continue to pick up as we head into the end of 2019. Higher inventory levels in some areas are offering buyers multiple options to choose from. They are not in a rush.”
What does a stabilizing Vancouver housing market look like? According to Royal LePage, it’s a market where the aggregate price of a home in the region is still close to $1.2 million.
The brokerage found that the average price of a two-storey home in Greater Vancouver was over $1.5 million during the third quarter while a condo cost nearly $650,000. All these average prices declined when compared to the same period last year. In fact, only two areas of the region saw a price increase versus last year — two-storey homes in North Vancouver and condos in Langley saw marginal increases.
So prices are on the decline, inventory is on the rise and buyers are in control in Vancouver. Where do we go from here?
“These days may be coming to an end,” Ryalls says prophetically in the media release.
First off, in the final few months of the year, Royal LePage expects another price decline similar to the one experienced in the third quarter. If you’re a Vancouver home seller looking to offload your property for an aggressive price, you’re likely going to wind up watching it collect dust on the market.
But, as solid economic fundamentals such as a strong labour market join forces with pent up demand for housing and favourable mortgage rates, the market may begin to shift away from buyers’ territory.
“Greater numbers of buyers are taking advantage of favourable market conditions and excellent mortgage rates, leading to what appears to be a solid footing in our price correction,” says Ryalls.
“Low unemployment, wage growth and pent-up demand are contributing to a change in market conditions that we should see emerge in the coming months.”
The message: Buyers in the Vancouver market should enjoy their privileged position while they can.