WHAT IS WITH VANCOUVER'S REAL ESTATE MARKET?
The number one question we've been asked as of late... Here's the deal, the honest deal. The numbers don't lie, and neither do we!
In Summary, 2012 Shaped Up Like This:
Prices remained constant in most categories with the exception of luxury condominiums and houses. If you've heard about decreases in overall prices of detached homes or condo's this was due to the fact that the number of high end, luxury sales, was down significantly from 2011. Thus, not having as many high priced sales brought the average price of all product down; however, prices have held or increased in most of the entry level markets, as investors and first time buyers take advantage of low interest rates & plenty of inventory to choose from.
Areas that thrived in 2012:
East Vancouver, North Vancouver & Burnaby
Areas that softened in 2012:
Vancouver's Westside & West Vancouver
Product that thrived in 2012:
Entry level 1 & 2 bedrooms Downtown Vancouver, East Vancouver, Cambie
Entry level detached homes = $800,000 - $1,000,000 in East Van, North Van, Burnaby
Townhomes, detached coach houses & 1/2 duplexes throughout Vancouver's Westside, East Vancouver, North Vancouver
Product that softened in 2012:
Luxury Condo's Downtown Vancouver
Detached homes and land in West Vancouver & Vancouver's Westside.
Who was Moving?
There were certainly some demographics who were on the move in 2012, here they are (as witnessed by me):
Young Couples starting a family - selling their condos or townhomes and moving to their first detached homes.
Retirees - The kids have moved out, the house is too big, time to downsize and get a product that is lower maintenance.
Investors - The rents are higher than ever & interest rates are sub 3%!! Real estate is creating great returns and making for solid investments for purchasers. These guys and gals are buying up entry level condos like crazy! Furnished rentals are popular, or long term leases = mortgages go down over time, prices trend upwards long term, rents go up s investors come out as winners.
First Time Homeowners - These folks are tired of paying sky rocketing rents and want a piece of the pie. Even if their first places weren't their dream homes, they got into the market.
Surprises in 2012
The massive changes to mortgage rules that came into affect on April 1st, 2012 really shocked the market. Prices were on their way up in the first quarter of 2012 until these changes were announced and put into effect very suddenly. After April 1st 2012, when the Bank of Canada's new rules became applicable, (2 of which included reducing amortization's to maximum 25 years, and not insuring mortgages over a million dollars without 20% down) we saw a significant slow down in the market. Our sales numbers dropped (over previous years) and inventory remained high. The news and media was bleak and this created concern among buyers. Most assumed a drop in prices was on the horizon, but sellers stood their ground. They sold their properties if they received a price they were satisfied with, and if not, they rented their property out or kept it on the market but held their prices and waited.
PRICE CHANGES - 2010 to 2012
What Does 2013 Hold? The Mexican Standoff Continues!
The trends we witnessed in 2012 will be very similar to what unfolds throughout 2013, in our opinion.
Buyers want deals, but sellers want market value for their properties. We just don't see prices coming down much this year, if any, because Sellers in Vancouver are not relinquishing control to buyers.
Inventory is down 33% in Vancouver over November 2012 so this is helping to create a more balanced market again. For only being mid January there certainly are a lot of buyers out looking at properties right now... people can't wait forever, families are growing, renters are ready to invest in a home of their own, life happens and people need to move.
We could go on and on about the market for hours, if you'd like to know more, or specific information on what's going on in your neighbourhood, we'd love to hear from you. Shoot me an email or call me direct 778-387-6090, we're always happy to chat real estate!
Thanks for reading!
Kelsie Struch & Morgan Duvernet
Award Winning Vancouver Realtors
Century 21 In Town Realty