February sales finished roughly 15-16% under the 10-year-average and finished under the 2018 levels. I anticipate that this is the beginning of a possible storm ahead. Mortgage stress tests have been loosened and the Bank of Canada has cut down on the interest rate by 0.5% just 2 days ago. This is the first rate cut since 2015 when it caused a significant housing boom. Interest rate cut has consistently led to big housing booms in the last 20 years and this will certainly cause another housing boom in Vancouver. Sales watch has never become more interesting now over the next several months.
Total Inventory struggled to rise during the first half of February but it started to pick up during the latter half rising over the 9,000 mark to finish the month. It is widely anticipated that the TI will cross over 10,000 in March, 2020 which is a welcoming sign for buyers looking for options. But with over-ask and at-ask sales increasing in frequency, deals are becoming harder to find across REBGV.
New Listings finished low again for 4 years in a row for the month of February. You will see from the chart above that the 4 lowest data points are in fact 2017, 2018, 2019 and 2020. When will we start to see some New Listings? The good sign right now is that the New Listings picked up during the last week of February and the first week of March so far has been very strong. So it finally appears that we will see some New Listings in March. Stay tuned...
MOI has dropped to 4.5 as expected for the month of February. MOI is anticipated to drop in March which means that the market will fall further in seller's market. It appears increasingly more likely that 2020 will be a seller's market as government policies (loosening of the mortgage stress test followed by the interest rate decrease) take into effect. The next question now appears to be just how much of a price increase will we see in this year's market?
MOI 0-4 months: Seller's Market
MOI 4-5 months: Seller's Market (but price increase expected to be similar to annual inflation)
MOI 5-7.5 months: Balanced Market
MOI > 7.5 months: Buyer's Market
