MarketBrief

Who could have guessed what 2016 would bring?

The low points were many:

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Brazil & South Korean presidents, both women, both impeached.

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Trump as President elect!

 

The end of far too many legends:rip

…to name only a few.  

Horrendous terrorist attacks in Germany’s Christmas Market, Bastille Day in France, a nightclub in Orlando and unfortunately too many innocent lives lost in the name of Allah than we can mention here.  

 Kim Kardashian was robbed in Paris and Brad and Angelia split up, Pokémon became a craze again – people even died playing it?  The Panama Papers uncovered even those that can afford it, are averse to paying taxes.

 There were some high points too!

panda
No Longer endangered!

Pandas were taken off the endangered list and the Cubs won the World Series!  While here in BC’s largest city real estate ruled our headlines over and over and over again all year long.

 

It was a turbulent year, with unthinkable peaks followed by a steep downward trajectory ending with the lowest of valleys in 10 years. 

china
Lots more where this came from?

The year began with a bang as foreign buyers tripped over themselves in record breaking numbers to extract their money out of China and tuck it into a safe place – Vancouver’s residential real estate market.

Our market became a playing field for speculators, investors, money launders and other crooks, turning profits in the greed and chaos that was early 2016.  People (yes realtors too) bent the rules cashing in on millions; regulators and governments scrambled to get any kind of rein on the fast moving market, but as is typical, the moves were slow and ineffective.

The writing was on the wall by May 2016.

 February 2016 was the summit of the high-end housing market.  The 15% tax on foreign buyers, implemented in a most precarious and questionable way on August 5th, had little effect on a market, which had flat lined months before Christy’s big announcement. 

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Though the government has tucked a feather in it’s hat on this one, take a look at this graph of properties selling over 4 million in Vancouver’s West side and West Van.  Clearly the market had run it’s course before the intervention!

graph1

The tax did however, add further instability to a market already in transition.   Many of our readers don’t know this tax is in effect only in the Vancouver area of British Columbia from Bowen and Lions Bay to Maple Ridge and Langley it does not include outer areas such as Squamish, Sunshine Coast & Whistler or Vancouver Island etc.  It does not include commercial properties of which the largest proportion is owned by off shore investors.  If this tax was effective, we would be seeing a rise in prices in those areas out side of the tax rule, but we are not. 

It is not as it would seem lets drill down

What we see today is a mixed bag to say the least.  It’s tempting, but misleading to lump our market into one.  We have specific products and zones, which sales range wildly from high highs to low lows

For example the condo market in North Vancouver has a sales to active listings ratio of 82%. – Very much a sellers market, but West Van’s detached market has a ratio of 11.2 %.  In fact the detached market has taken the biggest hit all around the lower mainland.  There will be some good buying opportunities in 2017 we are sure.  

In contrast the town home and condo market out performs in almost all locations and multiple offers and rising prices still prevail.

RULE OF THUMB Keep in mind the sales to list ratio –  20% or higher is considered a sellers market and 12% or lower a buyers market – anything in between is a balanced market.

Take a look at this table of Sales to Listing Ratios to see the highs and lows of major markets in Lower Mainland. Broken down into areas, a more precise way of looking at the market and very interesting too!

 First review current averages:  The average sales to list numbers look like this: Town-homes  42%, Condominiums 50% and Detached homes  15%

 With this in mind we see some very strong performances as of today:

Area

Sales to List Ratio

 

Townhome

Condo

Detached

North Van

57.7

82

26.8

West Van

25

22.9

11.2

Westside

29

43.4

15.9

East Van

57.1

73.6

11.7

Burnaby N

20.8

76.3

19

Burnaby S

52.4

40.9

11.5

Burnaby E

85.7

50

11.6

Richmond

30.7

46.3

12.4

Port Moody

40

84.6

18.2

Coquitlam

36.6

59

20.5

Port Coquitlam

39.1

72.2

26.1

Maple Ridge

59.1

40.4

26.5

Tsawwassen

50

22.2

8.7

Sunshine Coast

18.8

13.3

20.5

Squamish

27.5

30.8

7.5

Whistler

38.2

36.8

3.3

Bowen Island

 

 

5.9

Averages

42

50

15

In the Detached category 

Some neighbourhoods continue to outperform, while others lag behind.

The Winners are:

1-North Van at 26.8%

2-Maple Ridge at 26.5%

3-Coquitlam at 26.1%

Biggest losers are:

Whistler at 3.3% – time to pick up that chalet!? 

We were surprised with Squamish at 7.5% and Bowen at 5.9% but more locally West Vancouver at 11.2%

Burnaby N & S at 11.5 & 11.6% and Richmond

 

In the Town home category

“Town homes are the new detached home.”

The Winners are:

1-Burnaby East at 85.7%

2- Maple Ridge at 59.1 %

3-North Van & East Van at 57.7 & 57.1 respectively

Biggest losers are:

Sunshine Coast by far at 18.8%, but the rest are all pretty strong with the lowest being North Burnaby at 20.8 %, West Van at 25%

 

In the Condo category

Sales remain strong throughout the lower mainland.  Even the lows are not so low.

The Winners are:

1-Port Moody with a strong 84.6%

2-North Van at 83%

3-North Burnaby at 76.3 %

Biggest losers are:

Sunshine Coast 13.3% – not a surprise, Tsawwassen at 22.2%, West Van condos – almost always a tough sale at 22.9% and then it jumps up to Squamish & Whistler at 30.8 & 36.8%

What’s in store for 2017? 

We are always surprised when anyone claims to have the answer to this question.  Every “expert” has been wrong in the past, so why will their predictions be correct now?  Vancouver’s real estate market has never followed the key indicators – so why would it follow any specific course now?  No one foresaw the highs or the lows, why do they know now.  One thing we do know is, no one really knows. 

The market is not dead, it is highly selective.  Christy Clark’s intervention was a knee jerk reaction, which only highlighted her hyperreflexia condition. 

There are 3 “professional opinions” out there.

1.     The market is dead and will remain dead as prices adjust by 25 to 30% – does it look dead?

2.     The market is adjusting, we will see some overpriced properties decrease, but, as usually happens it will again pick back up by end of the year and surpass where we left off.  A 10% adjustment on the high end  has already happened, but the sales have  picked up as each line graph indicates.

3.     Market is already on the road to recovery, sales have picked up and we will see prices increase by the end of this year.

Affordable housing is a thing of the past and twinkle in the eye of Christie Clark, it’s never going to happen here in a desirable city with little land.  We have to get over that.  However somewhat affordable condominiums and town homes are becoming the next best thing.

We tend to safely pick the middle ground as activity continues at a reasonable pace and sales continue to improve, so we will remain optimistic and keep on doing what we do best – help our buyers and sellers navigate an ever changing, ever surprising newsworthy market.


 

Our 3rd Annual Valentines Dinner Giveaway.
heart

Win dinner at Carmello’s in West Vancouver.

Carmelo’s and us want your dining experience to be a memorable one. The menu—a blend of Italian & West Coast flavours— friendly staff, creates a comfortable environment for both lunch & dinner.. Try the pizza—made with fresh ingredients & cooked in a wood-fired oven—and you will love it, just like we do.

To enter, like our Facebook page or write a review of Andrews Group on Google and we will randomly draw from all entries.
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