MARKET UPDATE – SPRING 2015
As I predicted last fall, we have had one of the busiest Spring Market’s on record. March activity was up 38% compared to the same month last year. And detached house prices have been on a steep climb on both the Westside and Eastside. The offshore market is back at full strength for large Westside lots, and the local market has exploded creating a feeding frenzy on Westside entry-level homes, half duplexes, and Eastside houses.
The best way to follow the pricing in our market is to look at the Housing Price Index (*HPI). So, in summary, here is a snap shot of what happened the first three months of 2015:
* The HPI benchmarks represent the price of a typical property within each market. The HPI takes into consideration what averages and medians do not – items such as lot size, age, number of rooms, etc. These features become the composite of the ‘typical house’ in a given area.
While sales are increasing, the new listings are decreasing further feeding the rise in prices. This increasing Sales/Listings ratio creates the perfect opportunity to list. If you look at the graphs below you can see how our market pricing is rapidly climbing this year.
Why are prices climbing so rapidly?
Here are some factors to consider when we speak about Vancouver’s real estate market:
» The fall in oil prices negatively impacts Alberta’s economy and housing market. When the going gets tough in Alberta, residents flock to BC in droves.
» The lower Canadian Dollar attracts investors from Asia and the United States
» BC currently has the number 1 economic growth of all provinces in Canada forecasted at 3% for 2015
»BC has delivered a balanced budget for the third year in a row paying its debt down this year by one billion dollars, while the annual deficit of the remaining provinces is expected to break 15 billion dollars
» Rock bottom interest rates make borrowing money so cheap it makes no sense to buy with cash even if you have it.
» Consumer confidence is rising and buyers are much more confident in our economy and the stability of the long-term real estate market in Vancouver.
» When the sun finally shines in Vancouver, there really is no better place on earth to be. We have the ocean, the mountains, good schools, safe neighbourhoods, clean drinking water, a booming free enterprise economy, rock solid banking system, and an ethnic mix creating the flavors and colours we Vancouverites have come to enjoy!
Ma
rty’s magic window – What can we expect? If we have already seen 5% increases in detached prices across Vancouver, it is not unreasonable to expect house prices to increase at least 10-15% this year. As long as that external demand for land continues, and interest rates stay low (and there is no sign they won’t), we can expect a good 3 year run on this market surge.
The Real Estate Timing Analysis
When should I be selling my home? One of the things we cover when we
meet with you is our Real Estate Timing Analysis. We track all the sales data over the past 5 years and tabulate this data into one easy to follow Stats Package that enables us to make informed timing decisions for our clients. When the sales activity patterns are graphed year after year we see definite patterns defining ‘Sellers Markets’ and ‘Buyers Markets’ throughout the year. The interesting
point is that the patterns repeat themselves year after year.
Why is timing important? Well, for example, if you were able to time the sale
of your existing home in a Seller’s Market and offset the purchase of your new
home to a Buyer’s market it will mean substantial gains in both the sell and
buy, in some cases amounting to hundreds of thousands of dollars. When we
meet with you we will point out these cyclical markets, advise the best timing approach, and show you the tools we use to make this possible without you having to move twice. Its great stuff!
