The sales super cycle that the Metro Vancouver housing market has been in for two years is ending. It is nearly over in Fraser Valley, where March sales were down 22.5% from a year earlier and average prices dropped nearly 6% from February 2022, and similarly in Greater Vancouver where home sales were down 25% from March 2021 and averages prices were down 13%. A sure sign that the lower end of the market is thriving more.
The after-spring break activity brought an increase of listings to the market that will continue as we move through April. However, we are still sitting with just a 2 month’s supply of homes available for sale homes available for sale in most areas, with North Vancouver, Burnaby, New Westminster, Coquitlam, Port Moody, Port Coquitlam, Tsawwassen, Pitt Meadows, Maple Ridge and Squamish all at or less than a 1 month’s supply.
Continued lack of supply is keeping buyers from being able to find their next home and list their current one. The B.C. finance minister has confirmed that a mandatory ‘cooling-off’ period is coming as their way to protect buyers, especially when competing in multiple offers, which could very well be at a reduced level by the time the legislation is law. The rules will then stick around and simply frustrate buyers and sellers. This in effect will give a buyer a period of days to reconsider their offer and walk away from it. While no details were provided, a monetary penalty could be part of that ability to walk away, which in effect would lock in first time buyers and those without the resources to utilize that strategy.
Finally, we are seeing price exhaustion. This is apparent now in outlier suburbs, which had seen dramatic price hikes since 2020, but we will also see price increases slowing in central areas, at least through the first half of 2022. Prices can only go up so much. The true test of the market will be over the next month as interest rates continue to rise, with the Bank of Canada making its next announcement on April 13. Its a foregone conclusion that the overnight rate will increase. It just remains to be seen whether it will be up 0.25% or 0.5, thereby increasing variable rate mortgages.
If you thinking of selling, list now. If you are buying, enjoy the greater selection on the market. Either way, please call me. I’m always happy to help.