Vancouver Real Estate Prices Set to Turn
WOLF! WOLF! WOLF!
I feel a little like the boy who cried wolf. I’ve been saying that the market is going to turn for so long that maybe now no one is listening. Well, take a look at the Months of Inventory graph. What you will see is that all home types have just had a significant jump in the Months of Inventory metric in January. The change is from both substantial increases in active listings and an equally significant reduction in sales in January. This is by far the biggest change since things got hot early last year and changes of this type generally continue in a positive feedback loop – meaning, they tend to do more of the same. That means that I expect even more inventory to come online in February and March and I expect sales to stay lower than they have been for the past six months. Next, take a look at the Westside Avg Prices graph. What you see is a steady increase in prices over the course of this year – with record average sale prices posted for apartments in October 2009 and for Detached and Attached homes in January 2010. Yes, that’s right; the AVERAGE cost of a detached home on the west side of Vancouver in January 2010 was over $2,000,000. Now, finally, take a look at the Average Price Graph from 1977 to Dec 2009. Here we see the story of real estate; it goes up and then goes down where it lays typically for about 10 years (but as little as 3), then it goes up to a new high and falls again. Ask yourself if the drop in 2008 followed by the fast increase in pricing in 2009 fits that trend. No, it does not. For anyone who is still listening: I believe we have at best, 6 months and at worst, 2 months before prices begin to trend downwards. I am listing my own home for sale today (I need more space anyway!).
The same old story applies; if you are planning on living happily ever after in your home for the next 10 years then you should smile and carry on. If you are hoping to make your fortune selling your home anytime soon, it can not be soon enough.
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.
By Sam Wyatt - Vancouver Realtor
Months Of Inventory Graph Jan 2010
Vancouver Westside Avg Prices Jan 2010
Average Prices 1977 to Dec 2009