Homes sales across the Vancouver region rose over 40 percent last month when compared to January 2019. But as sales continue to steadily improve following a long slump, a new challenge is threatening to slow the market recovery: a lack of new listings.
While January’s sales were up when compared to a year ago, they remain 7.3 percent below the 10-year sales average for the month. This may not have as much to do with wary prospective homebuyers sitting on the sidelines as it does with a relative lack of supply on the market.
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According to data released this week by the Real Estate Board of Greater Vancouver, there were 3,872 newly listed homes for sale in the region in January. That’s a 20 percent decline compared to the new listings supply total for the same time last year and 17.4 percent below the 10-year new listings average for the month. Meantime, there were 8,617 homes on the market in January, a 20.3 percent decline compared to the same time last year.
REBGV President Ashley Smith flagged the unusual declining supply as a trend to watch heading into the spring season.
“We’ve begun 2020 with steady home buyer demand that tracks close to the region’s long-term average,” said Smith in a media release.
“Looking at supply, we’re seeing fewer homes listed for sale than is typical for this time of year. As we approach the traditionally more active spring market, we’ll keep a close eye on supply to see if the number of homes being listed is keeping pace with demand.”
The trend of dwindling supply and increasing demand is similar to what’s playing out in Toronto. In both cities, strong employment figures, population growth and low mortgage rates are helping maintain high demand levels following a cool period for the market. But while Toronto is seeing this supply and demand mismatch lead to significant price spikes, the same effect is not present in the Vancouver market…yet.
REBGV’s benchmark home price for all Vancouver region property types declined by 1.2 percent year-over-year to $1,008,700. In general, year-over-year declines have been a fixture of REBGV’s data reports over the last year.
However, there are some signals that the trend is beginning to reverse, with prices rising over the previous month as well as over the last six months. With persistent demand and supply that just isn’t there to meet it, expect prices to keep pushing upward through 2020.