Low Inventories and Strong Market Continue
The months of inventory index continues to stay near and below the 3 month mark for all home types on the Westside of Vancouver so upward price pressure has continued and should be expected to continue for several months to come.
Active listing volumes continued to drop for the seventh month in a row. Sales volumes increased for detached homes though they decreased for the second month in a row for both apartments and attached homes. The effect of the robust sales and falling active listing volumes has kept the Months of inventory index low (below 3 – see Months of Inventory graph). The strong trend of low inventories and generally increasing prices has continued to defy most forecasts for this year. Interest rates remain low and the general confidence of home buyers appears strong. This strong market was started in large part by the sharp drop in prices last year and historically low interest rates. These conditions helped pull more first time buyers into the market which in turn enabled existing owners to sell and “move up” to larger homes. This domino effect still appears to be in action but will almost certainly have a short life span. In particular, the lower average price on apartments over last month may be the writing on the wall for that segment of the market. I still expect to see sales figures to fall over the next several months and for this falling demand to begin to push the Months of Inventory index up. The unanswerable question is exactly when.
This is a prime seller’s market and I strongly urge those of you planning to sell property within the next several years to contact me and act now to capitalize on these excellent market conditions. For those of you looking for principal residences, the historic low interest rates (likely to rise next year) make the cost of borrowing mortgage funds quite attractive.
By Sam Wyatt: Vancouver Realtor
Remember that: “Months of Inventory” is a measure derived from the number of active listings during a given month divided by the number of sales that month. It indicates the theoretical length of time it would take to sell all of the properties on the market if nothing changed. Historically, 0-5 months of inventory has generally implied upward price pressure for the ensuing six months, 5-8 months of inventory meant a flat market with respect to pricing and over 8 months of inventory has, for the most part, precipitated downward price pressure.