July 2018 Westside Market Update

Typically, the 2nd quarter is the busiest time of the year and that is the case so far this year. The supply of Westside detached homes listed in June is down 1% from May (840 from 850) but up 20% compared to June 2017. Westside detached home sales this June were down 16% from May (89 to 75) and down 33% compared to 112 sales in June 2017. This year, sales volumes are off 67% from sales in Apr. 2016 (pre foreign buyer tax). July and August are usually slower.

The increase in supply and decrease in demand has resulted in an increase in Months of Supply (MOS) to 11.2, from 9.6 last month which is also up from 6.1 last June 2017. (Usually a balanced market is in the range between 4-5 & 6-7 MOS with prices rising below 4 MOS and falling above 7 MOS). With MOS increasing this month, detached home prices have dropped 6.3% to $3.757M from $4.012M on average and 6% to $3.009M from $3.2M on the median. This is down 17% on average & 21% on median from the highs in 2017. If demand stays low, MOS will stay high and that will continue downward pressure on prices.

The highest sale price for a Westside detached home in June was a whopping $23M. The lowest price was $1.625M. Of those sales, 12 received the asking price or more and 63 sold below the asking price.

Westside apartment supply increased 5% to 1191 units in June from 1137 in May and this is up 76% from the 676 listings we had June 2017. Demand dropped 8% to 327 sales in June from 356 in May 2018 and this is down 29% from 460 sales June 2017. MOS in June is 3.6 up from 3.2 in May and up from 1.5 last June 2017. These levels seem low but they are trending up and put downward pressure on prices. The average price dropped 7% to $943K in June from $1.010M in May and it dropped 4.5% from $988K in June 2017. The median price increased less than 1% from last month and 2.8% from June 2017.

Westside townhouse supply increased 9% this June to 279 homes from 255 in May and that's up 86% from 150 in June 2017. Demand in June is down 9% to 50 units from 55 in May but this is down 23% from the 69 sales last June 2017. With supply up and demand down the current MOS increased to 5.6 from 4.6 in May and up 254% from 2.2 last June 2017. As you would expect average prices decreased 16% to $1.319M from $1.567M in May and were down 7% from $1.418M last June 2017. Median prices decreased 18% to $1.25M in June from $1.53M in May and this was down 8% from June 2017.

Detached, Attached and Apartments on the westside are now all experiencing price reductions and while this is creating good buying opportunities, buyers are holding off in anticipation of further declines. This will exacerbate the decline and soften prices further. It is hard to know what will trigger a recovery but the fundamentals in Vancouver have not changed so it is all about when and not if it will recover.

Please call me at any time for a considered response to any and all of your real estate questions.

Best regards,