According to the Canadian Mortgage and Housing Corporation (CMHC), a sales-to-new listings ratio above 0.55 is associated with a sellers’ market. In simpler terms, if more than 55 homes are sold for every 100 homes that are newly listed for sale over a specific time period and geographical area, then the real estate market for that area during that time period can be described as being a sellers’ market.
According to statistics data taken from the Multiple Listing service, Vancouver neighbourhoods that have been experiencing sellers’ markets for first 3 months of 2012 are listed in Table 1 below.
- Median detached home prices in sellers’ markets are seeing double digit percentage increases year-over- year. Homes in neighbourhoods that are further West in East Vancouver (neighbourhoods like Main, Fraser) are higher priced compared to homes located further East (neighbourhoods like Hastings East and Renfrew Heights).
- Median attached home prices (condos, apartments, townhouses) in sellers’ markets have modest percentage increases.
- All neighbourhoods who had a sellers’ market during the first quarter of 2012 are located in East Vancouver. However, the West side of Vancouver is still more active with regards to total sales and listings. The most active neighbourhoods with regards to sales in Vancouver for the first 3 months of 2012 are listed in Table 2 below.
Affordability may be the reason for the increased interest in East Vancouver. For residents who are looking to move into a detached home and stay within the city of Vancouver, East Vancouver is an attractive option. Neighbourhoods such as Main have many local amenities – such as a community centre, transit, shopping, and restaurants – that are a draw for many residents. As a result, median sale prices in the Main neighbourhood for the first quarter of 2012 have increased 12% year-over-year to $1.1M. Unfortunately, even certain parts of East Vancouver have become less affordable than before.
For investors, East Vancouver was an attractive option perhaps because these neighbourhoods were experiencing strong year-over-year percentage increases without West side prices. For example, the neighbourhoods of Point Grey, Renfrew VE, and Fraser are all examples of neighbourhoods where median prices rose 15% or more year-over-year. But where a home in Point Grey had a median price of $2.12M in Q1 of 2011, a home in Renfrew VE and Fraser during the same period had a median price of $693K and $789K respectively – therefore requiring a buyer to put in less capital for similar percentage gains.
Affordability may also explain the interest in apartments and condos outside Downtown Vancouver. Most neighbourhoods that experienced a sellers’ market in the condo market were over $100 per square foot cheaper than a condo in Downtown VW and Yaletown. While the neighbourhoods of Downtown VW and Yaletown are still the most active with regards to sales, median price per square foot has stalled or slipped slightly since this time last year.
- Even in a slow market, there are individual properties and neighbourhoods that outperform the overall average. For the first 3 months of 2012, the sales-to-new listings ratio for the city of Vancouver was 0.43 (43%), which is a ratio associated with a balanced market. MLS statistics data suggest that 13 neighbourhoods for detached homes and 13 neighbourhoods for attached homes beat the city wide average.
- For owners who live in East Vancouver and are planning to sell, get in contact with a realtor who can give you regular updates of your neighbourhood’s real estate market.