The latest statistics have been released by the Real Estate Board of Greater Vancouver and as expected there was much less activity in the month of April than we normally see for this time of year.
“The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,109 in April 2020, a 39.4 per cent decrease from the 1,829 sales recorded in April 2019, and a 56.1 per cent decrease from the 2,524 homes sold in March 2020.”
Since my last update in early April the market has been very quiet, as most buyers and sellers take a wait and see approach.
The good news is there seems to be some light at the end of the tunnel with Dr. Bonnie Henry and Premier John Horgan announcing plans to re-open the province. There is still a long way to go of course, but it feels like we have turned a corner and hopefully that will bring some positive momentum back to the real estate market. It has been encouraging to see how well British Columbia has handled the pandemic.
Sales to active listings ratio is a great indicator for understanding whether or not a market is a seller’s or buyer’s market. This was also touched on and explained in the REBGV statistics document, which is attached to this email.
“For all property types, the sales-to-active listings ratio for April 2020 is 11.8 per cent. By property type, the ratio is 10 per cent for detached homes, 14.7 per cent for town homes, and 12.4 per cent for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. ”
Right now the statistics are showing prices holding firm, however in reality, if you needed to sell right now you might have to take less than you would have in early March. I don’t mean a significant amount less, but in order to convince a buyer to buy right now instead of waiting, then the price may need to be “sharp”. Having said that, there is evidence this week that that is already starting to rebound. The best thing to take from all of this is that sales were down 40% in April 2020 as compared to April 2019, yet prices have not come down on paper. This is yet another example of how the real estate market in Greater Vancouver shows that it can withstand tough economic conditions.
The key to predicting how the market reacts in the coming months will be to watch if there are any second waves of the pandemic. As I mentioned in my last update, if the pandemic continues late into the year or longer and sales remain low, then there will likely be downward pressure on prices. If we see an improvement in coming weeks and more areas of the province continue opening, then I expect the real estate market to bounce back. That likely won’t happen over night of course, but a slow return to normal activity levels should take place as long as we see steady improvements in community health and public confidence.
If you have any questions about your particular neighbourhood, or how activity is for a particular segment of the market, please don’t hesitate to contact me.