As we discussed in our February Market Update, it has been a very busy start to the year in Vancouver’s real estate world and that has only ramped up further over the last 4 weeks. February 2020 sales increased slightly over January 2020 sales, but the dramatic increase was over February 2019 with a nearly 50% rise in sales.
Vancouver’s Westside saw sales increase year over year by 44% for detached properties, 40% for condos and 62% for townhomes. East Vancouver also experienced a large gain in sales activity with a 59% for detached properties, 46% increase for condos and a 6% increase for townhomes. In our January update we spoke about the ‘bottom-up’ effect where properties under $1,000,000 had started to sell in the last half of 2019 freeing up capital for the $1,000,000 to $1,500,000 properties. Those properties have been selling very quickly with multiple offers, so that has continued the trickle-up effect throughout February as we’ve seen a large increase in activity on properties in the $1,500,000 to $3,000,0000 segment. Last week we were involved with 7 properties, ranging from $500,000 up to $2,500,000, all having multiple offers. Further up the real estate ladder, we have also experienced a significant increase in showing requests on our higher end listings (over $3m) in the past few weeks and have received offers on a few of them as well. Prior to this, these listings were very quiet with only a few showings per month. This is inline with what the real estate stats have shown for February with a 50% in sales in the detached market. As the weather continues to improve over the next few months and as more properties in the $2m to $3m range sell, we expect that capital will be redistributed in two ways:1. Into the $4m to $6m detached segment of the market as residents looks to move up in the real estate market; and2. Into the $1.5m to $2m condo market as downsizers look to purchase luxury condos after selling their detached family homeFrom what we have experienced this year, the buyers and ‘real sellers’ (not those asking prices 25% above market value) have been mostly local (those having lived in Vancouver for 10+ years) as the influx of foreign capital has yet to regain the volumes we experienced several years ago. That said, we have seen more activity from Mainland Chinese buyers in recent weeks with our low Canadian dollar and all the political, medical and economic issues happening in China (and around the world). We have often seen Vancouver real estate as a ‘safe haven’ for capital during times of uncertainty, so that will likely be another factor in our market as we head into the Spring. The other significant news this week was the Bank of Canada reducing the prime rate to 3.45%, the first rate drop since July 2018. With this 50 basis point (0.5%) decrease we expect an immediate reaction from buyers who have now had their buying power increase by approximately 5%. As a result of the above, we had our busiest February in recent memory selling over 15 homes, and we expect March to continue that pace. It is our opinion that property values are at their highest today than at any point in the last 3 years and while there are still many prudent buying opportunities available in the current market, we feel the window may be closing. If you would like to discuss your real estate needs, whether they are buying or selling, we would love the opportunity to meet with you to discuss your unique situation and show you how we consistently outperform the market, regardless of the market conditions.
Sincerely,
Patrick Weeks Real Estate