hello I’m Marty Pospischil
I’m here to give you our June 2020 market update so let’s run through some information here that I put together for us and I promise you I’m gonna keep this fairly short so I can get right to the point, get right to the meat of our market update.
Let’s talk about what has happened in our marketplace sales provincially have recovered slightly since April into June. We do see a bit of a bump in activity in our residential sales so that’s a very good sign but they are about 45 percent lower than normal for this time of year compared to May 2019. Active listings are down by about 25 percent year-over-year, and this is a very interesting point because it’s gonna play a role on the pricing.
We’re going to talk about that shortly so the active listings have actually dropped over the last couple of months and they are projected to take off again so lets let’s pay close attention to that.
Let’s look at the sales ratio we talked a little bit about this last time the sales ratio basically is the absorption rate of product that sells every month. So for example if you have a hundred houses and 15 of them sell in a given month the sales ratio or the sales to Actives ratio is another name for it is 15 percent so if you look at the table there in red on the screen behind me you’ll see if the sales ratio is below 11 percent absorption rate you’re in a buyers market. It’s favouring the buyers if it’s between 12 and 20 percent it’s a balanced market. It’s not favouring the buyers or the sellers but if that sales ratio is above 21 percent you enter into a seller’s market.
Multiple offers prices appreciating and of course in a buyers market prices are depreciating so the sales ratio is a very good metric that we use to track how active the market is and what kind of market we’re in now.
Interestingly enough if you look at the sales ratio we are right at the bottom end of a balanced market overall in British Columbia, for all product types.
So that’s kind of interesting to note because as you recall from my last projection using the BCRA information CMHC information all the projections we are supposed to be getting a sharp increase in inventory and a short decline in pricing so you’ll notice that our market of course has dropped through 2020. We’ve dropped down from a seller’s market through a balanced market and just creeping up at the top of the buyers market, now entering into a balanced market.
Why is that?
Let’s take a look a closer look at that let’s look.
WHAT IS HOT AND WHAT IS NOT
Okay if we look at detached houses on the west side, we’re looking at the sales ratio of 12%. So that tells me that detached houses are right above a buyers market just entering into a balanced market. That’s kind of interesting: it is a good time to buy a detached house.
Let’s look at condos on the west side if we look at Vancouver west side condominiums you’ll see that the sales ratio is at 15% now that’s really interesting because condos are obviously on the west side a little hotter right now the detached houses were smacked out in the middle of a balanced market for west side condos now.
Let’s pop over to the east side of Vancouver and you will see detached houses east side all right an 18% sales ratio so they are at the top end of a balanced market almost breaching a seller’s market.
Houses in the east side are very busy, look at the sales ratio I’m under a million three hundred percent a million to a million a quarter fifty-seven percent sales ratio and that is extremely active so that’s interesting to note.
Let’s look at condos on the east side again we’re very active we are in a seller’s market for condos east side twenty two percent sales ratio very very interesting so that in a nutshell is what’s happening in our market.
The projected increase in listings if that happens supply and demand economics 101
prices are going to fall if by chance sellers do not list and we have a limited inventory coming out coming out day by day that is going to hold the prices where they’re at or they may shoot up dramatically and if the demand has limited choice the prices will hold so be very
interesting to see what happens over the next few weeks I’ll be sure to keep you posted thanks for joining me today.