I have to admit. I am flummoxed. That’s right, I said flummoxed. Last year, 2008, we had record numbers of people trying to sell Vancouver real estate and competing for a record low number of buyers. Prices fell dramatically as a result.
Turn to today, the end of Spring 2009, and we have dramatically fewer numbers of homes on the Greater Vancouver real estate market and boom year numbers of buyers looking.
So the question begs; Where did all the Sellers go?
I have spoken to a few who were unsuccessful in the past year and the overwhelmingly popular answer for why they are not considering selling now is that they think the price is too low!
Too Low!
Can you believe that?
Let’s run some facts for you here:
FACT: Listings have plummeted in comparison to last year.
Some areas have fewer than 50% of the listings they had the same time last year when listings were climbing at a record rate.
FACT: We have more sales happening right now than we did last year.
Some areas have more than 30% greater sales volume happening right now.
FACT: This imbalance between supply and demand has resulted in a cautious seller’s market and prices over the past month have gone up!
No, the prices are not at their peak values and whether they ever return to that level is a question only an oracle can answer (which I am not) but I do know that the prices homes are fetching these days are certainly not a small hill of beans. These prices are still well beyond the average Vancouverite from affording a home so the supply of buyers who are attracted at these interest levels and able to make the move up are in a still-limited supply. Were prices to go back up to the peak I have to say that I believe we will hit heavy price resistance in the market as the supply of able buyers declines.
The likelihood of prices staying around where they are right now is pretty good for the near term. Should interest rates rise, watch out! Should the confidence the market has right now wane from any external pressures, watch out! Should prices drop two months in a row, resulting in a media frenzy of fearful headlines and buyers lose confidence, watch out!
That is why I am flummoxed. There seems to me no better time than now to sell (if you were thinking to do so anyway, had tried before, or it was part of your plan). To not place the home on the market when prices are stable, buyers are eager, and supply is constrained because you hope prices go back up to near peak levels is more than likely to cost you in the long run.
Vancouver, BC 
I have to agree with this one. Realtors are an optimistic bunch, (which is one reason I like working with Realtors so much – love optimists. I am one myself). But this isn’t just being optimistic. You nailed it here. One would think the numbers of sellers vs buyers would be reversed. Yea, sure it dropped a bit but wow it’s still a great sell time.
Do you think it has something to do with the time these expired listings purchased their property? A lot of people purchased during the highest point and if they are looking to make money (rather than sell for reasons life throws our way), they will have a long wait I suspect.
None of the people I spoke with who thought that prices were too low to sell now alluded to that situation. The shortest term of ownership had been 8 years and the longest 16 years. That’s not to rule out that they may have other debts from investments made via HELOCs. Though I suspect if someone were underwater they wouldn’t be having the friendly chats that we have… maybe just a quick “not till prices go back up, thanx, bye.” *close door*
I suspect (hope, as I’m waiting to buy) that it’s a “spring bump” as has been seen during the U.S declines. With the current economic situation, I’ll be shocked if prices don’t start falling again in June-July.
So people aren’t selling because they think prices are too low? Wow. The speculative bubble lives on. It sounds like you’re enjoying it while it lasts though!
Enjoying it? Well, it is better than doom and gloom. That’s for sure. But I could do without all the multiple offer situations my buyers have been in.
From the few people I’ve talked to (family, friends, people at work), they all collectively believe that the Olympics will, as my manager recently told me, “put Vancouver on the map”. This in turn will cause RE prices to head back up.
Maybe the flood of listings many of us were expecting are coming in Spring 2010.
There’s no doubt that it will heighten Vancouver’s reputation on the global stage (those who play winter sports plus Jamaica
) but whether that will in turn result in a rush of well heeled buyers looking to invest here is a whole another question. One that I, frankly, doubt. Those who would normally be attracted to here are not going to have their eyes suddenly opened to the benefits of this region over two weeks. I wouldn’t doubt that it will improve our tourism over the following years, however, as reports reach back home of the fantastic time they have here… unless it rains. A lot.
With the weather we’re currently having it makes you wish we were hosting the Summer Olympics right now.
The supply and demand situation changed dramatically the past 2 months. The market sentiment has changed, and good homes at current price level are selling well. At best home prices may stabilize at current level.