It’s hard to believe but the first three months of 2021 are in the rearview mirror, and what a busy first quarter it was for the real estate market. Fuelled by record low interest rates, low inventory and a real motivation among buyers to move up in the market, or to simply get into the market, we are seeing record levels of activity for home buyers and sellers. The market began heating up in the second half of 2020 and there was no cooling off in winter as January, February and March saw unprecedented levels of activity.
According to the latest statistics released by the Greater Vancouver Real Estate board, last months sales were 72% higher than the ten year average for the month of March.
“In March, residents bought and listed homes across our region at levels not seen before,” Taylor Biggar, REBGV Chair said. “This surge in activity is increasing upward pressure on prices. We’re beginning to see double-digit price gains for single-family homes and townhomes over the last 12 months.” REBGV Chair, Taylor Biggar went on to explain, “While we did see a record number of listings enter the market last month, the demand in today’s market isn’t allowing that new supply to accumulate. As a result, the overall inventory of homes for sale decreased compared to last year,” These quotes really sum up what has been happening in the market. Record demand, low supply and all time low interest rates, you don’t have to be an economics major to understand what is happening.
So what can we expect in the second quarter and the rest of 2021? The Bank of Canada has stated that they do not plan to raise interest rates until 2023 meaning that the cost of borrowing money will remain extremely low. Barring a seemingly unlikely change in supply or demand, this will keep prices moving upwards at least for the rest of this year. Some experts are wondering if the government will try to intervene to calm things down. At some point in the future it is possible a new stress test is introduced or perhaps even a capital gains tax on principal residences, but the latter in particular is a very hot button topic. With the ongoing pandemic, I doubt we see a major change from the government, but perhaps once the majority of the population is vaccinated and things start to return to the old normal, perhaps a change could be introduced.
I am hopeful we see more listings hit the market, as they typically do this time of year. Again, we have seen listings coming on at a good rate but the demand has been too much for it to balance the market. Spring time is historically the best time to sell a property and with these record prices being achieved I think there is a very good chance we see more and more new listings and thus some balance could come to the market. Time will tell, of course. For your information, I have attached the latest stats package to this email.
If you are considering selling, now is clearly an excellent time. If you are looking to buy, be patient, be calm and be ready to act quickly if the right home catches your eye.
Please don’t hesitate to call or email me if there is anything I can do to help.
Stay safe and well!
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