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Market Update

APRIL 2013

We are into April and, as expected, the market is showing signs of picking up. While there is much talk in the news of March sales being down up to 30% over the 10 year average, sales have increased substantially compared to the first two months of 2013. This is a trend is likely to continue through April and May. Interestingly, and perhaps a result of some Seller's believing too much of what they hear on the news, the number of listings in most market segments are decreasing. I suspect we will see inventory start to climb again slowly as the both consumer confidence, and the weather, begin to improve.

You will note that our numbers are presented slightly differently this month. Due to a couple of technical changes with the real estate board, we are no longer able to pull the information in the same way we did before... at least not with proper accuracy. As the real estate board does not separate townhomes from condos, which we find extremely valuable, our price breakdowns have become more limited for those segments. We apologize for the change.

Let's start with the Detached market this month:

On the Westside, March 2013 look remarkable similar to March of 2012. Sales, inventory and active listings remained virtually the same, though we did notice an increase in time on market. Compared to February, we noted a big 46.2% uptick in sales, perhaps spurned by some more realistic sellers - as evident in the slip in Median Pricing of 11.9%. The sub-$2m market remains quite active here with a marked down turn in the higher end properties.

Moving to the Eastside, we note a few differences to what we are seeing on the Westside. Here, March showed a substantial drop of 39.4% in sales compared to 2012, in spite of the 22.1% increase over last month. Inventory increased only slightly, while Median Pricing sat 5.1% below the same time last year. The entry level price bracket remains to hottest product here, but there was some healthy movement in the $1.5 - 1.75m range as well.

Over in North Van, we are seeing more inventory start to hit the market, but we also saw sales spike 48.7% over last month. Median Pricing is down 8% over last year and slipped slightly compared to February. Basically all price segments are moving swiftly at the moment here, with the exception of the upper end $1.75m+ market.

The townhome market is more consistent across market segments. Year over year, we are seeing inventory remain relatively stable, while sales have fallen 14.7% - 29.3%. Median pricing has slipped in all three segments as well, though all three have been less than 4%. We also noted inventory drops and a substantial uptick in sales activity compared to last month, so the townhome market as a whole is showing signs of strength.

On to the condo market: Sales have increased between 14% and 47% in every area of town, with the number of listings and median, average & price/sqft holding relatively steady. Breaking down the price categories, we see a very balanced market, meaning every type of condo has interested Buyers. The one bedroom and sub $425k market (where new Buyer's can get a Property Transfer Tax exemption) is performing best, with condos in Vancouver East being the lowest priced (and having the biggest increase in sales).

As noted above, all markets are showing rising sales and lower inventory, which is leading to a more balanced market and stabilizing prices. We've noticed that if you have a unique property that's priced sharp and marketed well, it will sell quickly. The change from PST to GST will decrease the tax on new construction, as well as real estate commissions, which may add some movement as well. If you have any questions, please don't hesitate to ask.

Rob

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Comments

Gina Andreou on Apr 12, 2013 3:03 PM
I definitely like your glass half full approach but thought I’d pass along some constructive criticism relating to these monthly reports. As someone who is considering selling a “unique” detached property in Kits, these reports aren’t entirely helpful in identifying how the market is currently trending. I feel like these reports could be super useful if you could better tie them together.

For instance:

March statement
“We have, in years past, seen this upswing delayed into March, so we will be keeping a close eye on the March numbers.”

April statement
“While there is much talk in the news of March sales being down up to 30% over the 10 year average”

So would you characterize March sales of 30% below the 10-year average as a delayed upswing?

March statement
“sales have increased substantially compared to the first two months of 2013”

They definitely have, but does this always happen? How does this seasonal increase compare to previous years?

March statement
“While sales numbers are lower than we are used to for February, we are expecting a very busy March/April as more inventory hits the markets and anxious buyers jump back in”

Since you’ve taken the time to go through the data, it would be helpful to know if March and the first half of April has been what you consider busy. Do you still feel like the market is comprised of a healthy amount of anxious buyers?


I think following up on the previous months ideas would be a great addition. This is just my two cents and it’s entirely possible that others might feel differently.
Rob Zwick on Apr 13, 2013 11:20 AM
Gina,

Thank you for your feedback, it's definitely appreciated. It's always a challenge to come up with an overall interpretation of what the data is saying about the Vancouver Real Estate market, while at the same time keeping in mind what you wrote and felt 30 days prior. Also, after the Fall that we just went through, seeing "normal" cycle characteristics, is far from what could of happened at the beginning of this year. It's just been so unpredictable over the last 8 months, that anything could have happened. With all of that said, I hopefully can give you some additional info about what I currently see in the market.

January and most of February were sluggish, which wasn't the case in the prior two years, but something really changed towards the end of February. For me, it all started with the sale of West 3rd in Kits.
http://robzwick.com/mylistings.html/details-29119599
I listed it for what was bang on market price, based on all of the comparables. We went on for $649,000 for a 2 bedroom 1/4, fourplex, and we had above average traffic, but more importantly, we had two groups of people who had been looking for something just like this for that past 6 months. They both pushed for us to look at offers early, so I said that we'd look at very strong offers, if they were presented to us. We ended up selling the property for well over asking and in a timely manor. This was could have been just a blip in the market, but then I listed a unique detached house, also in Kits, for a very similar price to where it had been listed for in the Fall, and again it sold in the first week, and very close to asking.
http://robzwick.com/mylistings.html/details-29655269
This sale was important, because it allowed me to see a direct comparison to the Fall market, where we had been unsuccessful in our attempt to sell the property for what my clients wanted. As a side note, a very similar house had sold a block away for over $100,000 less in the fall, so we could conclude that was market value for this house 4 or 5 months earlier.

This house: http://robzwick.com/mylistings.html/details-27885864 and this condo http://robzwick.com/mylistings.html/details-28191299 are also good examples of listings that didn't sell in the Fall and sold for good prices in the last couple of months.

Then there was a series of sales that happened one after another, and for close or above asking.
http://robzwick.com/mylistings.html/details-29517563
http://robzwick.com/mylistings.html/details-29421609
http://robzwick.com/mylistings.html/details-29651339
and just yesterday, this listing sold for $30k more then a similar unit sold for 2 weeks prior. I did a better job then the previous agent, but this is still a large price gap in a short amount of time. http://robzwick.com/mylistings.html/details-30416679

At the end of the day, what I'm seeing now, is that there is plenty of demand for GOOD listings, since there really was a lack of good product out in the market before the new year. With that said, the price sensitivity out there is incredible. Over pricing something by just a couple of percent, can lead to very little activity, so I can't stress enough how important it is to be realistic in your price point.

This is not meant to be a commercial of how great of agent I am (eye roll), but it's to illustrate what I've seen in the last 8 weeks or so with evidence to back it up.

I hope that helps!

Excuse any typos...

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