I don’t think so and I see some really positive signs that tell me we will see some improvement this year. Despite what is being reported in the media and chatted about around the water coolers, the real estate market is not dead!
Are the number of sales down? Yes they are. We’re down about 14% over last year, but considering how unrealistically HOT the market was in early 2012 and some previous years, this really tells me we’ve had an adjustment and some hot air has been let out of an over-inflated balloon. Vancouver real estate has been clipping along at such a frantic pace for so long, very few people have any conception of what is normal.
Are the number of homes for sale UP? Yes they are. But only by approximately 5% over last year. Also notable is that the number of new listings coming on the market has dropped by 11% over this time last year. That’s a good thing. This tells me we should see inventory levels start to decline which will bring us back to a more balanced market this year. What’s more important is what I call “REAL INVENTORY”. These are the homes that are reasonably priced based on current conditions. Real Inventory is actually pretty low right now. Most homes for sale are totally out to lunch and have effectively taken themselves out of the running. Still in today’s market, many homes sell very quickly for close to, or more than asking price.
Have prices dropped? In the past year the Benchmark price has dropped in many areas. In some it has actually gone UP! It really is area and price range specific. It’s hard to identify any areas in our region that have shown a price drop from today to over the past 3 plus years. Real Estate is still a safe investment.
What’s going to happen? I believe we will continue to see softer market conditions that we’ve come accustomed to over the next year. But again … really, what is normal? Inventory will continue declining as greedy and unrealistic sellers drop out of the market. It’s possible we could see the prices drop by the end of the year, but I highly doubt it would be by anything significant. I believe it’s more likely the prices will have stabilized and start to rise very gradually as we get further into the year.
Who has an advantage right now? I see opportunities for the following people.
- First Time Owners. Prices have dropped and interest rates are really low for now. Prices aren’t likely to drop further by much, if at all by this time next year and over the next 3 to 5 years this will be a good investment.
- Investors. For the same reason as first timers.
- Move-up buyers. When the prices go down, everything is less expensive, including the commissions to sell and the price paid on the next home. The great news for this person is that there is little concern of not being able to find the next home. We do have more choices. Market conditions are perfect right now for the “mover-upper”.
Who do you listen to? There are multiple opinions on what’s going on out there. If you’re confused and want to get a clearer picture, please give me a call. If you know anyone who needs help with real estate and is looking for a good agent, I have one in mind!