REBGV June, 2021

 

Total sales are starting to trend down to typical seller's market territory but it is clearly still on fire as it is clocking above 3,500 this month.  Generally speaking, any month with sales over 3,000 is a solid seller's market.  The next question seems to be whether the sales will plateau over 3,000 for the rest of the year.  There's no reason to believe that sales won't stay over 3,000 until the end of the year given the current influx of interprovincial and international immigration that is raising rent prices back up and further supporting Vancouver real estate market.

Total Inventory has sadly taken a dip month-over-month.  This is the first time we are seeing a month-over-month drop in June since 2015.  This is an unusual phenomenon and foretells more month-over-month decline in July and August.  In all other years when there was a month-over-month drop in June, there was another 1,200 to 1,700 inventory lost by the end of August for those years.  With the current Total Inventory count being under 11,000 at the end of June, we can anticipate that the Total Inventory will drop under 10,000 again before the end of August.  This will cause more bidding wars in September causing upward pressure on real estate prices.

New listings are falling too fast to support the current level of Total Inventory.  Known as the last ray of hope to fight against upward pressure on real estate price, new listings went from record high in March and April to being only 300 above the 10-year average.  With just 5,849 new listings this month, it was beat out by 3,762 sales and 2,218 delistings/expirations (combined total: 5,980).  It is early so far in July but early data suggests that July's new listing will be below 10-year average.

Here is another bad news for bears.  Delistings and expirations which are typically supposed to be low in a seller's market is defying odds and increasing again for 4 months in a row.  While, it is generally expected that delistings rise month-over-month from March to May, it is not common to see delistings increase in June as you can see from the chart.  To make matters worse, early data in July is suggesting that delistings will jump even higher in July to 2,400-2,800.  With July sales expected to reach over 3,000+ easily (611 sales already after 3 reporting days in July), new listings will need to be at least 6,000 to keep the current inventory level at where it is right now.  But even in the most bearish scenario, there is really no chance that Total Inventory will be more than 5,000 in July.  Expect some massive decline in Total Inventory in July.

Monthly inventory is inching up in the seller's market territory.  We are not seeing the same kind of sustained upward pressure that we saw in 2016 and 2017.  But this is more dangerous in a way because it gives the false sense of the market normalizing while upward pressure on price continues to be maintained as MOI is still well under 4.5.  Early data in July suggests that MOI will stay level in July putting the value of MOI near par with 2016 and 2017 again.

Buyer's market: MOI greater than 7

Balanced market: MOI between 4.5 to 7

Seller's market: MOI under 4.5