Vancouver Real Estate February 2016
The story of Westside Vancouver real estate of late has been one of few active listings. In January, for apartments and attached homes, there were fewer than then there have been in over a decade.
We are in deep sellers' territory. I have been speculating as why the inventory is so low and have come up with two possibilities. The first is that a hot market makes current home owners feel good about their real estate assets. With prices up, existing owners are reluctant to sell because they think owning the property is a great investment. The same is often true in reverse when markets decline, people question the wisdom of owning and most folks stampede to sell. In each case a positive feedback loop gets created. The other possibility is that people are finally stuck. Price increases may have outpaced people's ability to trade up. Historically folks have sold their existing home to upsize to the next best thing. Taking their equity with them, they are able to buy their new home with only an incremental mortgage increase. With the price of detached homes in Vancouver in the stratosphere, the loan amounts needed to upgrade from an apartment to a house are becoming prohibitive.
If you can't buy the house you always wanted, why put your apartment up for sale? Whatever the reason for the ultra-low active listing numbers, the result continues to be reflected as a low Months of Inventory (MOI) index.
It is definitely time to sell your house if you are an empty nester. The recent spreads in price per square foot between houses and apartments are historic.
It is also likely a great time to sell Vancouver investment properties if you are getting close to retirement. Crystallizing your gains at such a high hot point of the market is a safe way to hedge against any possible downturn.
*Remember that Months of Inventory (MOI) 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.
Do not hesitate to call me if you have any questions. Please pass this and my contact information along to any friends or family who might benefit from my services.
- Sam Wyatt Vancouver Realtor