Photo: Sebastian Stephan Thiel/Flickr
After facing a 10-year low this time last year, Vancouver home sales continued to hit above average levels this fall with another solid performance in November.
With 2,498 transactions recorded last month, home sales significantly outmatched November 2018’s activity level. The monthly total beat the 10-year home sales average for November by four percent and was good enough for a 55 percent year-over-year rise, according to the Real Estate Board of Greater Vancouver, which published its November sales and price data earlier today.
“We started to see more home buyer confidence in the summer and this trend continues today,” says REBGV President Ashley Smith in a media release accompanying the data.
Prices remained on the decline across property types, with the MLS Home Price Index — typically the most accurate and consistent gauge of home prices — declining 4.6 percent year-over-year to $993,700.
While these declines are likely to continue into the new year, there’s reason to believe they will finally begin to reverse course at some point in 2020.
That’s because as home sales have already begun “flickering to life” again in the Vancouver market, as BMO Chief Economist Douglas Porter put it in a research note last month, prices are likely to follow that same path to stability.
The writing is on the wall too. Sales activity in the Vancouver market returned to normal levels in November but new home listings dropped, leading REBGV’s Smith to note that “it’ll be important to watch home listing levels over the next few months to see if supply can stay in line with home buyer demand.”
Conventional market wisdom dictates that when the sales-to-active listings ratio — a measure that compares sales to homes on the market in a given period — rises above 20 percent for a prolonged period, it leads to home price increases.
That ratio across all property types sat at 23.2 percent in November, with condos at 29.3 percent and detached homes at 17.2 percent.
So in other words, if sales are rising and listings are declining, prices will typically begin a march upwards as demand outpaces supply. At this point, that’s looking like the most likely scenario for the Vancouver market heading into 2020.
