After four months of the Vancouver real estate market softening, October appeared to be a month of consolidation. Back in June 2023 we saw the first signs that the strength of the first few months of 2023 was wavering.

 

It was at that time that we had a "surprise" interest rate hike from the Bank of Canada. That shock seemed to impact the psychology of our market and sap the confidence of potential buyers.

 

From June through to September of this year each successive month appeared to show more cracks in the Vancouver real estate market. Sales slowed, listings increased and prices wavered...along with rising interest rates.

 

But this past month was the first month since June where that slide appeared to slow. Sales increased, new listings slowed and the total inventory on the market remained flat.

 

Of course, the market isn't uniform throughout the city or even between housing types. The weakest market was for condos, and specifically condos on the westside of Vancouver...

We had 531 sales in Vancouver in September 2023. This was -22.7% from August but up +10.6% from a year ago. It was also down a resounding -31% from the 10-year average...continuing a trend that started back in July of this year.

It was back in July, just after the first "surprise" interest rate hike were we first started to see demand falter after a very strong first half of 2023. This is now 3 months in a row that we've had successive declines on the demand side of housing in Vancouver.

Meanwhile, supply has been growing.

There were 1,777 new listings (+22.8 m-to-m and +31.4% y-to-y) along with 3,642 total active listings. Total listings were up +8.4% from the previous month but importantly remain right around the 10-year average (-0.7%).

So supply has steadily increased through the year, but not to unusual levels. But with supply increasing and a pullback in demand we are seeing pressure on prices finally easing up.

Most housing types across the city were either flat or down slightly....

There were 723 sales in Vancouver in July 2023. This was an impressive 27% higher than the sales seen in July 2022...and could be otherwise pointed to as an indication of just how hot Vancouver's real estate has been lately.

That is, until you remember that last July was when the Bank of Canada raised interest rates by 1% and we saw a very quick slowdown in sales activity for the remainder of the year.

Looking more closely, we also see that sales were -15% from last month and also -16% from the 10-year average. By these measures, sales activity can clearly be seen to have cooled off from the torrid pace of the last few months.

New listings dropped to 1,525 which was -10.8% from last month but up +27% from a year ago and essentially flat when compared to the 10-year average (+0.4%). Total active listings rose to 3,403 but this was up just slightly over last month (+1.2%) and down (-12.6%) compared to last year.

We can see that generally all activity levels have tapered off to begin summer....

For the second month in a row we saw an a year over year INCREASE in sales. The 852 sales that happened in Vancouver were a whopping +19.5% higher than June 2022...BUT down -13.5% from May 2022 and also -8.9% from the 10-year average.

Significantly, this is also the second month in a row that monthly sales were over the 10-year average.

Meanwhile new listings hovered right around the 10-year average yet again. There were 1710 new listings in June 2023 (+0.7% on the 10-year average) which was up 4.5% from a year ago and down -5.3% from the previous month.

That resulted in total active listings sitting at 3201. Up just 2.3% from last month and down -18.9% from a year ago...as well as -9.4% from the 10-year average.

Prices are continuing to get ratcheted upwards. The most significant increases were for detached houses with East Vancouver houses leading the way with a +3.1% in just a single month. The only housing type to see any type of decline were East Van townhouses which were down a titch...

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With listings continuing to languish, home sales in Vancouver continue to bounce back to more historical norms. While we are still below the 10-year average and last year, this rapid comeback has surprised many after seeing eight consecutive interest rate hikes.

There were 735 home sales in Vancouver in April. This was basically flat over the previous month (-0.8%) but down a fairly significant -24.3% over the previous year...and -20% from the 10-year average.

New Listings fell slightly to 1,327 (-4.3% month-to-month and -31.7% year-to-year). This was -21.7% from the 10-year average.

With steady sales and a decline in new listings, Total Active Listings fell to 2,833. This was -2% m-to-m and -18.2% y-to-y. But most significantly this was -14.3% from the 10-year average.

Over the last 4 months we've seen a steady trend of demand increasing toward the historical norm while supply decreases. This has been putting increasing pressure on prices as eager buyers compete for the limited supply of...

Our market continues to strengthen.

After nearly a year of weakening, we now have a second month of strength. And the momentum is building.

By no means are we back to unsustainable levels of market activity. In fact, by most measures activity is still below the 10-year average. BUT, the trend is that the differences are shrinking.

The market is no longer frozen by fear (as it was toward the end of last year) and optimism continues to build.

Sales jumped to 741. That's up +43.6% month-to-month but down nearly -43% from a year ago. This was down -27.5% from the 10-year average (1,022).

New listings increased to 1386 which was up +27.2% from last month and down -34.6% from a year ago. It was also down -17.5% from the 10-year (1679). 

Active listings rose to 2824. This was just -1.2% off last month and down -10.1% from a year ago...but down -6.8% from the 10-year (3031).

So, demand is growing (sales) and supply (listings) continue to remain subdued. As a result, we are seeing a return to price...

Well...it looks as though my call was the correct one. Things didn't get worse. In fact, they are looking up.

Signs of the nadir of our market being behind us abound.

There's a renewed sense of optimism. It's night and day from last month when it appears pessimism peaked.

While things are improving, we are still well below the 10-year average on most fronts. Year-to-year comparisons will continue to look dismal as the last couple of years were quite extraordinary in our market.

Sales rose to 518. That's up nearly 65% from January (but down almost 50% from a year ago). It is also down 33% from the 10-year average (811).

New Listings increased marginally to 1,090. That was up +2.7% from a month ago but down -36.4% from a year ago. It was also down -24% from the 10-year average (1,436).

Active Listings rose very slightly to 2,769. That was up +1% from last month and down -5.5% from a year ago. It was also -7% from the 10-year average (2,769).

Prices are down across the board over the last year. However,...

January was very quiet in the Vancouver real estate market.

That's not unusual. January is typically the slowest month of the year...but this last month was unusually slow relative to what we typically see.

ALL activity was well below the 10-year average. But it's sales (demand) that took the biggest dip in January. The 313 sales were -38.4% below the 10-year average (-15.2% m-to-m and -55.3% y-to-y).

New listings increased over December to 1,061 (+170.1% m-to-m and -27.4% y-to-y). This was also down significantly (-29.1%) vs the 10-year average.

Overall listing inventory rose slightly to 2,631 (+0.5% m-to-m and -2.3% y-to-y).

We continue to see more stability/strength at the lower price points in our market. We can see that detached homes continue to become more affordable while lower price points pricing has stabilized in recent months.

Are things going to get worse from here?

I don't believe so, no.

Here's why.

1. Seasonality - January is typically the slowest month for sales. That month...