The waiting game in the Metro Vancouver housing market continues but more sellers are joining in and some are becoming impatient. One month a trend does not make. But we certainly saw more listings come on the market in Metro Vancouver in September – more so in the first half. As September moved on through the second half of September, fewer listings came on than in the first half and perhaps this was a cloud burst of new listings and not a constant shower. Much like the rain in September that came in fits and starts, while we have more inventory, it’s still far short of what’s needed.
The wild card is the direction of interest rates and, to an extent, that of the provincial economy. In any case, the pot on the table is getting larger as September saw 5,564 new listings pushed into play, the highest number since May 2023 and nearly 30% higher than in September 2022. Meanwhile, 1,926 properties were sold this September, almost as low as September of 2022, with just 1,701 transactions last year. Today, with 11,382 active listings in Greater Vancouver and another 6,532 in the Fraser Valley – and the sales-to-listing ratio falling – we believe some sellers will tire of waiting. The question is just how many.
We can expect some asking prices to come down, especially in the detached-house sector. Arguably this has already happened.
Let’s look at the environment through a potential detached house seller’s lens. The unpopular Bank of Canada shouldn’t raise interest rates again at its October sitting. I doubt even the Governor of the BOC knows for sure what to do. Let’s hope they don’t fall for the increase in jobs reported today in Canada and base a rate increase on that number. The B.C. Finance Minister just released an economic outlook that forecasts provincial GDP growth shrinking to 0.4 percent next year. Consumer confidence is fragile. If the rate does increase, even by a modest 0.25 percent as it did in August, it would further drag down detached house sales that are already lagging. In September, the sales-to-active listing ratio for detached houses in Greater Vancouver fell to 12.6%, signalling a buyer’s market. The benchmark detached house price fell 0.1% from a month earlier and it hasn’t budged in three months.
Those eager to sell a detached house may decide to drop their asking price now because the demand for homes benchmarked at more than $2 million will shrink even further. On the bellwether Westside of Vancouver, for example, the average sale price of a detached house was $403,000 lower in September than in January 2023. This doesn’t mean prices fell by that much, but that the composition of sales was such that more homes for less money sold than in January. With the cost of borrowing, lower price points are more attractive.
Its always a good idea to acknowledge softer markets when moving in the favour of the buyer. If you’re wanting to investigate how interest rates have impacted prices then it’s a great idea to give me a call and I’ll chart the course for your shopping experience!