REBGV October 2020 Projections

 

This year's October sales will smash all time October record for sales which is a very disappointing reality to many who were hoping for deferral deadlines to crush the homeowners.  It appears that many are selling and selling for profit on their investment as SAL ratio sores to record highs since 2017.  There is little doubt now how strong the sales will finish for the rest of the year.  Although sales will certainly decline month-to-month over the next 3 months, it will certainly track higher than the 10-year average.  There may be another 3,000+ sales in store in November to make it 5 consecutive months of 3,000+ sales which is a first since the foreign-buyer spree days of 2016.

Total inventory is declining toward the end of October largely due to very strong sales in October despite there being high number of new listings during the same month.  The end result is that the TI is falling in a very typical manner compared to other years while other so-called experts in CMHC predicted doom and gloom.   As you all know by now, you cannot have a doom and gloom without a SAL ratio under 10% and months of inventory (MOI) greater than 10.  Those numbers are not possible if total inventory is peaking at 13,000 for the year and falling 5% over a month.  Any small chance of a doom and gloom in 2020 has been completely eliminated.

The months of inventory (MOI) has fallen even further down in October to the lowest point since November, 2017.  This is quite concerning as the market turns to dangerous seller market territory.  Townhome SAL ratio is skyrocketing to 65% in Chilliwack, 48% in Fraser Valley territory (Abbotsford, Mission, Langley, Surrey and Delta) and 44% in REBGV.  These numbers are reminiscent of foreign buyer frenzy days except that this is being done by local buyers.  No one knew that there were enough local buyers during the pandemic as Covid-19 rages on to record high numbers this month.

MOI under 5: Seller's market

MOI 5-7.5: Balanced market

MOI >7.5: Buyer's market 

New listings continue to remain high as listers who could not list during the spring are catching up.  It has nearly all caught up by and the new listings will start to fall precipitously in November and December.  New listings will still be higher than usual compared to previous years but the month-to-month drop over the next 2 months will be very significant.

The narrative that sellers won't have the luxury to delist as they will be desperate to sell or face default on their mortgage has not been realized according to the delistings chart.  Sellers are able to delist as usual as delisting numbers continue to trend smack in the middle of this graph with appropriate month-over-month increase.  We should expect it to drop in November as it always does in November before spiking as usual in January.