REBGV April 2021

Sales increased to all time highs in both March and April this year during a buying frenzy like we've never seen before.  It was believed that the highs of 2016 could never be beat... until we've seen the unthinkable this year.  

We are starting to see Total Inventory (TI) rise during the spring as expected every year.  Not surprisingly, we are now in the positive territory for year-over-year TI change.  This is of course as a result of the pandemic causing suppression of TI in April of 2020.  It is certainly nice to see some inventory come out on the market as it appeared quite bleak for the past 6 months.

We are seeing record highs in New Listings what we've never seen before.  It is more than making up for the spring market we missed out on in 2020.  I expect the record monthly new listings to come down to the mid-7000s in May.  We should see higher than expected new listings for the rest of the year as the pandemic lockdowns come to an end.

Months of Inventory is second only to 2016 all year so far but we may see this year get beat by 2017 as sales start to cool in May.  But it is still well within the seller's market (seller's market is under 4.5).

We are seeing delistings rise month-over-month a bit more than expected in April.  We should continue to see monthly delistings rise in May which has a suppressive effect on the Total Inventory.

REBGV February, 2021

 REBGV February, 2021

Sales are exploding in the entire Lower Mainlands despite the ongoing pandemic concerns in what is turning out to be a real doozy of a year.  We are seeing sales beyond 3,500 which blows past the crazy year of 2015 and is only second to year 2016.  Sales are expected to rise again in March possibly up to 5,000.  There are no immediate policy change coming to stop the runaway train at this time as the government continues to release funds to keep the economy afloat.  Expect massive increase in benchmark price in REBGV of ~15% and FVREB of ~20% over the next 6-12 months.

Total inventory has fallen month-over-month for the first time ever during the month of February.  This is a very significant development and speaks to the real stress on the buyers as they face very limited number of supply while losing out on bidding wars time and time again.  Although we should still some increase in inventory in March, it is expected to be a very mild increase and well below what is needed for the market condition to return to balance.  

New listings rose in February month-over-month which was an expected development in a seller's market.  Sellers realize that bidding wars have returned and that they are excited to take advantage of this development after missing out on the entire spring market in 2020 due to the Covid-19 pandemic.  My prediction for New Listings is high.  I expect the New Listings to reach over 6,500 and possibly over 7,000.  However, I also expect the combination of sales/delistings/expirations to be over 6,000 making the Total Inventory rise only very modest.

We've not seen such a low Months of Inventory (MOI) since the foreign buyer tax was increased further in 2017.  The low MOI is only second to 2016 and the trend is expected to fall below 2.0 easily for March.  SAL ratio is expected to rise into strong seller's market with SAL ratio that is easily above 50% in March.  My prediction for SAL ratio for March is 55%.

MOI under 4.5 => seller's market

MOI 4.5 to 7 => balanced market

MOI over 7 => buyer's market

REBGV December, 2020

 

Greater Vancouver home sales have shockingly gone up month-over-month in December.  As clearly seen in the chart above, this is a record high in recent times and breaks all time high by a massive margin.  This is an alarming sign that early 2021 is going to be a real doozy.  Are we going to see likes of early 2015 or early 2016?  My guess is somewhere in between those 2 years.  Time to sit back and watch...

Total Inventory dropped by 2,580 month-over-month which is the biggest month-over-month drop in December since 2011.  It is well below expectations and there are no signs of panic selling as many predicted several months ago.  In fact, Total Inventory will continue to look quite low if sales continue to remain at such strong levels.

New Listings remain high but it is starting to return to more typical levels.  For the start of 2021, New Listings will continue to come closer to the typical 10-year average.  Given that the interest rate is anticipated to be low for few years, home prices are expected to rise steeply in 2021.  This means there will be many homeowners in the holding position to start the year.

Year 2020 wraps up after all as a bull market as Months of Inventory finishes under 5.0 in 9 out of 12 months of the year.  Months of Inventory continues its decline with only 2015 in its way of it being a historic low.  Sales are sizzling hot and it will continue to explode leading to suppressed Months of Inventory in early 2021.  

De-listings are falling off the chart as sales are exploding in December.  This is a typical finding of a market that is quickly turning into a seller's market.  This is an alarming sign that many more home listings are selling rather than expiring.  In 2021, I expect de-listings to remain low while sales skyrocket in early 2021.

REBGV November, 2020

 

Sales are staying hot in November with 5 consecutive months of 3,000+ monthly sales.  Remarkably, there were at least 700 sales every week this month without the typical weekly decline in November.  It is almost as if the buyers have not noticed that the greatest rise in Covid-19 counts and deaths are even happening this month.  We should see sales decline in December as the closure of Open House came into effect in November during this massive second wave of Covid-19 pandemic.

Total inventory is declining in a very typical pattern in November with it finishing just slightly above 11,000.  We should see a decline under 10,000 by the end of the year.  It's unclear what the new REBGV rule on expirations will have on the final annual count.  Sellers are allowed to keep their listings up during the pandemic without facing the typical rule applied to expirations.  It is likely that final TI count will fall around 9,000 in normal scenario but around 9,500 with the lenient rule in place.

The high new listings for the last 5 months appear to have finally made up for the lack of new listings in April and May.  New listings remain higher than usual although high sales are effectively absorbing the new listings.  Despite the high new listings, there are no alarming signs of "deferral cliff" in sight and new listings appear to be shrinking to its typical level.  In December, I predict that we will see roughly 2,500-3,000 new listings.

Months of Inventory remains very much in the seller's territory.  Only has 2015 and 2017 seen hotter seller's markets than this year in the month of November.  The market is being driven by a hot detached market that is coming out of 3 years of bear market.  Year-over-year, we are likely going to see about 10% increase in the value of detached single family homes by the end of the year.

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.

REBGV: September, 2020 Projections

 

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

REBGV August 2020 Projections

August sales will be right along the same line as July in the ballpark of 3,000 sales.  As August had 2 less business days than July, sales will look slightly less in August but the average daily sales have been actually higher in August.  So far, average sales per day in August is 151 sales per day whereas average sales per day in July is 142 sales per day.  September brings another intriguing month.  There have been record breaking new listings in August and we anticipate to see some of those translate into sales in September.  Don't be surprised to see another 2,800 to 3,200 sales month in September for 3 consecutive months.

Months of Inventory (inverse of SAL ratio) is remaining in the seller's market territory for August due to high sales.  One should expect high sales and high new listings again for September with both numbers being well over 10-year averages.  Both numbers being high should cancel each other's effect Months of Inventory keeping it level.  One should expect similar findings in September where Months of Inventory should remain between 4.2 to 5.0.

MOI under 5 = Seller's Market

MOI 5 to 7.5 = Balanced Market

MOI over 7.5 = Buyer's Market

Typical spring season TI increase was halted by Covid-19 pandemic this year.  One should remember that high transactions lead to TI increase and low transactions lead to TI decrease.  This is why we always see TI increase during spring and TI decrease during winter.

High sales/High New Listings during Spring = TI generally increases

Low sales/Low New Listings during Winter = TI generally decreases

Therefore, it is absolutely not a surprise at all that we are seeing TI increase right now as both sales and new listings are high.  What is more important is what kind of impact this volume will have on the SAL ratio.  And currently, SAL ratio continues to remain in the seller's territory.

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 3,000 of them back on the market since June (500 in June, 1,000 in July and 1,500 in August).  There remains another 3,000 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.  

There is little doubt that New Listings will be high in September.  We may see new listings like we've never seen before.  Out of 3,000 listings that has yet to return to the market, we could see 1,500 to 2,000 of them return in September in addition to typical 10-year-average for September.  This means that we could see New Listings as high as 6,500 to 7,000.  This will certainly have a positive impact on Total Inventory but the degree of TI increase will depend on how high sales will be in September.

September Predictions:

Sales: 2,700 to 3,100

New Listings: 6,500 to 7,000

Expirations: 2,200 to 2,500

Total Inventory Change: +1,200 to +1,800

REBGV July, 2020 Projections

Sales rose to pre-pandemic levels in June and is on track to explode in July to levels that were only seen during the foreign buyer buying frenzy days of the past.  Very few could have seen that sales would explode so soon even prior to the Open Houses being resumed in Lower Mainlands.  And now that the Open Houses have started again this past weekend, we can only expect the sales to at least be maintained at this level for at least another month.  The real concern right now is if the sales are rather too high.  If sales remain over 2,000 in August, that is 3 consecutive months of SAL ratio > 20%.  This is alarming as SAL ratio > 20% for 3 consecutive months is exactly when the housing prices start to increase.

My July Sales Projection: 2,900 - 3,100
My August Sales Prediction:2,500 - 2,800

New listings returned to above 10-year-average for June and will remain this way in July which is not  by any means a surprise as many of the listings that weren't listed in March, April and May are finally entering the market.  New Listings in August will break all kinds of record highs as this year's August will not be a typical "Holiday month" due to Covid-19.  However, we should see month-over-month drop in New listings from July to August.

My July New Listings Projection: 5,700 - 5,900

My August New Listings Prediction: 4,800 - 5,100

High new listings have added much needed inventory to the market that took a dive during the latter half of 2019 and remained low through the pandemic.  However, it remains woefully low in comparison to last year's numbers.  And there is no evidence that "buyer's market"-like Total Inventory levels are possible this year.  Total Inventory should remain stable in August, rise in September and fall off during the winter.

My July TI Projection: 11,900 - 12,100
My August TI Prediction: 11,800 - 12,200

Months of Inventory has fallen to 5 and is headed dangerously low under 4.  We are now at a point where one additional month of MOI < 5 months (SAL ratio > 20%) will cause upward pressure on prices.  There are already part of the market such as entry-level detached and attached properties (townhomes, etc) going into multiple offer situations and over-assessed sales.  As you can see from the chart, Covid-19 has essentially stopped what was clearly going to be a seller's market this spring but it doesn't appear to have been enough to stop it completely for the year.  Grab your popcorns.  This should be an interesting August and September coming up.

My July MOI Projection: 4.0
My August MOI Prediction: 4.3 - 5.0

REBGV June, 2020 Projections

Sales are returning out of the gates of Phase 2 re-opening in BC.  Although sales were expected to return, not many expected such an early increase in sales given that Open Houses are still not being done.  June's total will surpass last year's sales number.  Given the circumstances of 2020, this is a surprise to many.  Sales are expected to return to stable month-over-month figures next month as many buyers that sat the spring market during the lockdown return to market.



Inventory is starting to come back online in Phase 2 to make up for the losses taken during March to May.  It still sits below 2018 and 2019 numbers for now but it should increase well into September this year as more sellers return.



New Listings are coming back with a force in June.  It is estimated that roughly 5,000 new listings may have been compromised during the Covid-19 pandemic.  It appears that about 1,000 of them are now back on the market leaving about 3,000-4,000 additional new listings that will be topped up in addition to typical monthly totals over the new few months.  One can expect a fairly high New Listings number for July and August as New Listings play catch up.



Month of Inventory is starting to return to seller's market territory with MOI expected to fall under 5. It may be too early to tell for now but it is a must-follow trend of 2020 with Covid-19 still looming in our society.

REBGV: April 2020

The sales dropped to the lowest level since 1982.  Covid-19 has effectively suspended what was surely a seller's market leading into spring.  We should expect to see much of the same in May as social distancing rules have effectively ended Open Houses across Lower Mainlands and the rest of the country.  One can expect the sales to remain slumped in May while New Listings slowly start to pick up.

My prediction for sales in May, 2020: 1,100-1,400



New listings took a major dive in May as Open Houses was essentially banned due to Covid-19.  There are now rumours regarding whether Open Houses can resume as BC starts to ease restrictions on social distancing.  When Open Houses are officially back on (which could happen in May), we should expect to see some flooding of new listings.  Of course, increase in sales will follow this with about a 3-week delay.  Thus, I don't expect to see any spike in Sales in May but we may perhaps see it in June.

My prediction for New Listings in May, 2020: 3,400-3,800



The overall impact of record low Sales and New Listings in REBGV has in fact had a negative impact on Total Inventory much to the chagrin of many buyers out there.  Rather than leading to explosion of inventory, there is still not enough competition for sellers out there for there to be panic selling.  This is the first time that we have seen a negative month-over-month change in Total Inventory since 2009.  What is more impressive about this achievement this year is that the TI is already at a low level under 10k.  In fact, we are now under the TI level of April, 2018.  This is despite the fact that there has been record number of housing completions in Greater Vancouver over the last 2 years.  The buyers will want to see TI rise back up above 10k in May which is possible if Open Houses return this month.

My prediction for TI in May, 2020: 9,900-10,200



De-listings dropped slightly in April which is a bit of a surprise given the current pandemic.  Most listers have chosen to keep their homes on the market rather than taking it off during the pandemic.  This makes the negative month-over-month changes in Total Inventory even stranger.  If many more chose to de-list, total inventory could have dropped even more.  But this also means that many of the upcoming New Listings may not be so much Re-listings but rather true New Listings.

My prediction for de-listings in May: 1,600-1,900

REBGV: April, 2020 Projections

Due to the Covid-19 pandemic, sales will collapse to the lowest seen in decades and is roughly estimated to end somewhere in the 1200-1400 range.  This will bring the SAL ratio to the balanced territory.  As stated in my last edition, low transaction (low sales and low new listing) months don't lead to significant changes in prices particularly with SAL ratio in the Balanced territory.  We see this every December which has no impact on the spring market.  We will need to wait until social distancing rules are reduced to see which direction the market is headed.  Given that BC is effectively flattening the Covid-19 curve thus far, we could see businesses re-open gradually starting in May as John Horgan, Adrian Dix and Dr. Bonnie Henry suggested today.  Low sales are expected to extend into May due to Covid-19 before we start to see a slight month-to-month gain through the summer.

  

Total inventory will fail to increase month-to-month for the first time since 2009.  This is due to unprecedented low new listings we are seeing this month due to Covid-19.  We should see TI continue to struggle for May.  As long as TI remains under 12,000, the hope of a massive decline in benchmark pricing in 2020 is out the door.  Bears will want to see at least a 1,500 TI increase month-to-month to get to 12,000 or higher as fast as possible before the winter arrives.

   

We are seeing something here that we will likely never see again.  New listings falling off the cliff like we have never imagined.  The chart says it all right here and there is nothing more to be said.

REBGV: March 2020

I would like to start off by wishing everyone well during these tough times.  Stay safe and stay home! I would also like to thank our health care workers during this tough time who risk their lives everyday to keep us all safe!



As you are all well aware, we are now entering into a period in real estate market that won't be mirrored by any stats in recent times.  The initial March sales data was strong with total sales heading toward 3,000+ for the month of March with a SAL ratio of whopping 30%.  But the sales have been halted in the latter half of the month as social distancing measures closed down open houses and hindered real estate transactions.  With the government reporting that the current social distancing measures will carry on for the entire month of April, we should see a jaw-dropping drop in sales to about 1,000-1,300 in April.



Growth in total inventory was also halted by the Covid-19 pandemic with TI actually trending negative during the latter half of March.  This trend should continue into April and we could be seeing TI under 9,000 by the end of April.  We are very likely to see a month-to-month Total Inventory decline in April for the first time in 11 years with TI falling dangerously low.  With realtors reporting that up to 50-70% of current inventory not being viewable at this time due to the fear of Covid-19 spread, it is quite possible that the current true available TI count may be much lower under 5,000 which is unimaginably low for a population of 1.7 million+ in the REBGV territory.



New Listings were heading for high 4,000s in the first half of April but they have significantly dropped off as sellers are unable to hold open houses.  I also suspect that there are many sellers who don't want visitors entering their homes during the Covid-19 pandemic.  This has led to a significant drop off in New Listings which is exacerbating what has already been a low New Listings streak that has lasted for over a year.  We are going to see all kinds of records being broken in the upcoming April in terms of Sales and New Listings but I suspect that nothing will be as impressive as the drop in New Listings in the upcoming month.  It will likely be off-the-chart at around 2,500-3,500.



With so much going on right now with both sales and new listings plummeting, it may make more sense to look at the MOI rather than the individual sales and new listings data.  MOI has finally crossed that line under 4.  However, this will be very short-lived as sales will plummet in April due to Covid-19.  We will see a significant bounce up in MOI in April well within the balanced territory.

Having said the above, I don't believe that MOI can be interpreted to say that either the seller or the buyer has an advantage at this time.  Low transaction periods are tricky and the current pandemic situation is even more complex.  We see low transaction in December every year and the MOI in December is hardly useful in telling us what kind of market we are likely headed for in the spring time.

What we do know is that the market was certainly headed toward the seller's market prior to the pandemic.  As to whether this will resume when the world begins to turn again is anybody's guess at this point.  A bear can point to permanent job losses, business closures and bankruptcies but a bull can point to cheap mortgage and delay in housing constructions which is already trailing behind GVA population increase.

MOI 1-4 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

De-listing data is staying below 10-year average and will remain low in upcoming April due to the sheer lack of inventory in the market right now.  The DEAL Ratio (Delisting/Expiration to Active Listing Ratio) is typically around 11-15% in April so we should see expirations around 1,100-1,500 this month.