REBGV April 2019: MOI Projections

Month of Inventory will be reaching a new high for the month of April in decades.  Although there is no significant jump in new listings compared to the 10-year-average this month, the rising month of inventory is being driven by astoundingly low sales.  We are headed for a record breaking summer.  With all data points strongly suggesting a buyer's market, the next interesting marker to look at during the summer is just how much and how fast will price drop.

REBGV April 2019 Projections: Sales and Inventory

With a third of the month left, it is time for monthly projections.  As expected, the sales continue to struggle.  If it wasn't clear already, the data almost certainly shows that we will break the all time low sales record for not only the month of April, but also for the accumulated annual total.

With low sales come higher inventory.  The total inventory rise parallels that of 2008 and is projected to rise 3-4k more by the end of June.  By August and September, we should be flirting with record high total inventory.

March 2019 Vancouver CMA Construction Stats

Construction Starts have fallen from 2,645 in March, 2018 to 1,706 in March, 2019 which is a 36% drop.  However, the Housing Starts is still exceeding Housing Completions which means that current Housing under Construction has gone up again for this month.  The current housing under construction is 41,717.

By Housing Type, the increase in Housing under Construction in 2019 is entirely due to increase in condo/apartment constructions.  There is no doubt that the high number of condo completions will have an impact on the total inventory.  Condo inventory has already doubled year-over-year in REBGV and should continue to see a meteoric rise in 2019.

Meanwhile, there is a noticeable drop in detached family home constructions as there is less profit to be made from new detached builds or large-scale renovations.  Although the number of detached family home constructions are declining, it is not a historically low number and should continue to feed into the detached market that is struggling since the summer of 2016.

Seasonally adjusted total housing starts have fallen from 24,896 to 20,960 over the last 4 months.  Although Housing under Construction hasn't fallen yet, it is anticipated to start falling as record high projects come to completion during the next 12-24 months in the backdrop of declining Housing Starts.

More unabsorbed new projects are adding onto current Total Inventory levels.  This is almost identical to the rise in unabsorbed units during the latter half of 2008 for those looking to spot a trend.

*** all stats provided by CMHC

  

REBGV March 2019: Total Inventory

Total Inventory movement was typical for the month of March but is expected to pick up fast during the next 2 months when New Listings are expected to peak in April and May for the year.  You can expect to see Total Inventory in the mid-14,000 at the end of April and above 16,000 at the end of May.

REBGV March 2019: Sales

Sales have tanked in March, 2019 in REBGV territory.  While the sales ran parallel to 10-year lows very consistently for the last 12 months, this is the first month where the monthly sales have completely separated itself from any other recent comparable data points.  This one is for the record books and will be talked about for a long time.

REBGV March 2019: New Listings

New Listings have recovered in March after a snowy February but it was still lower than 10-year average.  There was a significant jump in New Listings last April and you can expect to see a significant jump this year also.  Expect to see New Listings over 6,000 during the upcoming month of April.  If sales are unable to keep up with huge influx of New Listings during the next 2 months, we will see significant rise in Total Inventory.

REBGV March 2019: Months of Inventory

Months of Inventory has now reached the highest point when compared to years dating back to 2008. Although the actual value has dropped in March, this is very typical of March which is supposed to be a seller's month.  This year, however, this has not been a seller's month.  Sales continue to struggle and the MOI is expected to remain steady for the next 2 months before rising for the remainder of the year (much like in 2008 and 2012).

< 5 months: Seller's market
5-8 months: Balanced market
> 8 months: Buyer's market

REBGV March 2019: De-Listings

De-Listings have been high (highest compared to other recent month of March).  This is one of the hallmark signs of a seller frustration as listings remain unsold for extended period of time.  It's expected to remain high for at least several months this year and can climb as high as it did in 2008 or 2012 during the fall months.

February 2019 Construction Stats

Housing Starts nearly doubled the number of Completions in February.  Year-to-date, Housing Starts is leading completions meaning the number of construction has now gone up for the year so far.  The active housing under construction is now at 41,453.  Expect this number to drop over the course of the year as Completions eventually overtake Housing Starts.

REBGV February New Listings

New Listings plummeted in February which is likely attributable to the poor weather condition across Vancouver in February.  If sellers were holding their new listings until the weather warms up, we should expect a significant rise in New Listings in March.  However, another low New Listings month in March could signify that there won't be a huge rise in Total Inventory (eg. 20k+) this year.

In March, New Listings may be one of the more important indicators to watch to see if sellers are starting to panic.

REBGV February De-Listings

February is by far the lowest de-listings month of all months.  De-listings have dropped appropriately month-over-month this year and sits slightly higher than middle of the pack over other months of February.  There shouldn't be any surprises in the upcoming March as de-listings should stay within the neutral range.

REBGV February Month of Inventory

February Month of Inventory (MOI) took a step under 8 months.  Drop in MOI is typical of February as it is generally a seller's month.  As the graph shows, MOI always drops in February.  And MOI almost always drops again in March meaning we should see MOI remain in balanced market territory in March.  The question is whether it will stay there for long past June.

> 8 months = Buyer's Market
5-8 months = Balanced Market
< 5 months = Seller's Market

REBGV February Total Inventory

The rise in Total Inventory this past month was typical for the month of February.  There was no surprising spike in Total Inventory in February but March should bring on more inventory as the weather warms up in Vancouver.

The overall reason for the modest increase in Total Inventory is because both sales and new listings under-shot during this past month (presumably due to particularly poor weather condition Vancouver experienced throughout the month).

REBGV February Sales

February Sales struggled to the lowest level in recent times.  It's unclear how much of the low sales are due to the effect of the weather in February.  If weather played a role, March sales should rise briskly.  If this is part of the pattern of low sales we've seen for the past several months, the sales should continue to struggle into March.

New Listings in REBGV organized by Year

New Listings in January was slightly above the 10-year average in January.  It is anticipated to drop in February due to increment weather.  The data was obtained from REBGV and the chart was originally created by Mark Choi from the Metro Vancouver Housing Collapse Facebook Site.

Total Inventory in REBGV organized by Year

Total inventory is back to normal levels to start the year and we should see the kind of increase in inventory similar to 2008 and 2012 to begin the year.  The data was obtained from REBGV and the chart was originally created by Mark Choi from the Metro Vancouver Housing Collapse Facebook Site.

Total Monthly Sales in REBGV organized by Year

We saw sales in 2018 follow the sales trend of 2012 all year last year.  However, we are starting to see January 2019 stats break off from January 2013.  We are starting lower and dropping further down in February, 2019 so far.  The data was obtained from REBGV and the chart was originally created by Mark Choi from the Metro Vancouver Housing Collapse Facebook Site.

Housing Completions January, 2019

Housing completions remain over 24k and is expected to remain at historically high levels in 2019 despite a slight dip in the last few months.  A recession in 2008 did not cause a drop in housing completion until 2010 as developers were slow to respond to the new market condition then.  History should repeat itself until 2020.

Housing Under Construction

Housing under Construction fell slight in January, 2019 but still remain at a historically high level over 40,000.  It is anticipated to fall under 40,000 in the next 1-2 months as housing starts continue to fall.

Housing Starts updated to January, 2019

Housing Starts continue to fall as developers are starting to delay or avoid new development.  The recent drop in Housing Starts mimic the drop we saw in late 2008 and in 2009.  We can anticipate a further drop in Housing Starts throughout the year.