As detached home prices soared despite falling sales, buyers and investors moved over to condos/townhouses. The peak for condo sales occurred in March 2016 at 2252; however peak frenzy was reached when the sales-to-active-listing ratio (SALR) topped out at 94.6% in May 2017.
I have been searching for years for good explanation for this ratio and finally found one a few months ago courtesy the BCREA:
“A very high SALR typically means that supply is falling short of demand and that home buyers are bidding up home prices. A very low SALR typically brings declining home prices as excess supply causes home sellers to bid down their asking price to attract a relatively scarce number of home buyers.” (BCREA Market Intelligence Report, Feb 2018)The SALR for condos has been falling since May 2017 is now at a level not seen since 2015. Here’s how it looked for the first six months of 2018.
Glacier Media Real Estate Reporter, Joannah Connolly, offered this insight in her July 4, 2018 piece for the North Shore News:
“Greater Vancouver condo sales totalled 1,240 in June 2018, a 34.9 per cent year-over-year decrease and a month-over-month decline of 13.3 per cent.The very long table below (right click on image and open in a new tab) gives a market history of condo/apt sales and prices from 2013-2018. The Benchmark sales price reached a new high in June 2018 but its acceleration is slowing. On the other hand, the average sales is definitely slipping - down -7.8% since February.
Even though condo sales fell a little harder than townhomes, the stronger seller’s market and more constrained inventory is keeping prices on an upward trajectory – albeit at a slowing rate. The benchmark price for a condo across the region is $704,200, which is 17.2 per cent increase from June 2017 and a 0.4 per cent increase compared to May 2018.
Moore [REBGV President Phil Moore] confirmed, “Price growth in our townhome and apartment markets is showing signs of decelerating.”
Putting the table above into the chart below...
The following table and charts show a definite acceleration in active listings - an almost exponential rise on a year-over-year basis beginning in March 2018 - June’s Active listings were up 81.6% versus June 2017. I wonder how many of these listings were condos purchased in 2016 and are now being flipped as those cheap two-year variable mortgages come due for renewal (at new higher interest rates).
(Because of the work involved, I will update the Greater Van data quarterly - the next update is planned for the beginning of October after the REBGV releases its September stats package.)