We are starting to see how impactful low interest rate can be when lockdown is removed during the pandemic. Rising active Covid-19 cases in BC doesn't appear to be deterring buyers from snatching up whatever they can. Sales are rising well beyond what was expected for September to a point where we are seeing a modern time record similar to 2009. Interestingly, 2009 was another year of low interest rate but the major difference between 2009 and 2020 is that the housing price is about 100% more expensive now than in 2009 despite the fact that there are more than 200,000 more housing units now compared to 2009.
The way the trend appears at the moment, it will not be a surprise to see strong sales into October. Sales over-asking or at-asking are making up 28% of all sales in September so far which is typical of seller's market. This means about a thousand buyers or more may have missed out on the purchase due to more competitive bidders. These unsuccessful buyers will spill over to October. But will the increasing month-over-month property value over the last 3 months due to low MOI put a lid on the current level of sales? Rising prices could dampen sales to some degree but price increase will likely last into the end of the year.
My October Sales Prediction: 3,100 - 3,500
As expected, new listings remain high post-lockdown. However, year-to-date new listings remain abysmally low at a 10-year-low whereas year-to-date sales in 2020 have already surpassed 2012, 2019 and 2020 year-to-date sales.
There were roughly 6,000 new listings that were compromised during the spring season due to covid-19 pandemic (1,000 in March, 3,000 in April and 2,000 in May). We have now gotten back about 4,500 of them back on the market since June (500 in June, 1,000 in July, 1,500 in August and 1,500 in September). There remains another 1,500 to return to the market assuming that all of them are returning to the market. Of course, there is no guarantee that all of them will be back but that may be balanced out by listings that will come on the market as a result of difficulties caused by Covid-19. Thus, I still expect that there will be high New Listings in October.
My October New Listings prediction: 5,000 - 5,500
Total inventory rise is starting to slow down. While it was going up by +600 in July and August, it is anticipated to go up by just 300 to 400 this month. We are nearing parity with last year's inventory level and we are likely to see October's total inventory finally reach positive year-over-year change. However, I anticipate that total inventory will finally drop month-over-month in October to halt a 5 consecutive month of rising inventory.
Months of Inventory is well in the seller's market for 4 consecutive months leading to ongoing housing price increase. This kind of MOI in September has only been beaten by foreign-buyer frenzy days of 2015 and 2017.
My October MOI Projections: 3.5 - 4.5
De-listings are rising against all odds in September. Anticipation was that desperate homeowners facing imminent mortgage defaults in October won't be able to delist in September and will be force to keep their listing on the market. However, the current rise in de-listings is quite typical for the month of September. This speaks to the holding power of homeowners at this time. I expect de-listings to stay in the middle of the chart moreorless for the rest of the year.
My October Delisting Projections: 2,400 - 2,800
De listings are rising against all odds? Um they have risen in September 11 times in the last 12 years in the month it sounds like a pretty sure bet to me. It would also seem that a 12 year record in listings has been pretty much ignored in your commentary.I suspect we might see monthly seasonal records set in new listing for each month remaining for the end of the year. However if I am wrong your premise that prices will continue to rise is correct.
ReplyDeleteI don't usually check comments and I just saw this comment for the first time. I clearly explained in the following sentence why delistings are rising against all odds as the general sentiment at the time (summer and early fall of 2020) was that the housing market will crash during the pandemic and that sellers wouldn't be able to delist their properties. Also, there is very little utility in comparing year-over-year records during a pandemic year to make predictions.
ReplyDeleteLooking back, it is surreal how many thought that the housing crash was imminent in the fall of 2020. The prices are up 15-25% in various sectors of the housing market since the fall of 2020. The data does not lie.