Metro Vancouver Real Estate Market Report for October 2020
How has the need for more space at home during the pandemic changed the real estate market?
Author: Meryl Hamdillah is a licensed REALTOR with Sutton WestCoast Group and an active community writer in Tri-Cities and Vancouver. If you’re planning to buy or sell real estate in Tri-Cities or Metro Vancouver areas or you want to stay up to date in real estate market, feel free to call or text 604-307-9506
Meryl’s Market Insight
Homelife and home space has become very significant during the pandemic especially as people entrench themselves for the long haul. The real estate market reflects these shifts in buyer confidence, in lifestyle and ultimately in behaviour.
This year, real estate sales trends have been completely opposite of normal seasonal trends – We have had a sales dip in normally busy spring and are now experiencing record peak sales in a typically slower fall. Most traditional real estate reports compare only the same months in the past (this is known as a seasonal adjustment). HOWEVER, this is an unprecedented year that breaks all seasonal trends. Exclamations of a record breaking #sales in a normally slow month doesn’t tell us much. We have to look at this in a different way.
Let’s look at townhome sales in a different way…
October’s sales for each property type:
Detached Home Sales: 1335, a 33.1% ▲ above the 10 year avg.
Townhome Sales: 782, a 95.9% ▲ **above the 10 year avg.
Condo Sales: 1177, a 33.4% ▲ above the 10 year avg.
**We noted that many of our clients told us they have had to reconsider their needed living space and were looking at townhomes for the first time. Townhomes are attractive to both upsizers from condos and downsizers from detached homes.
From MLS data, we noted that townhome sales in Greater Vancouver over last 10 years were on average 399 monthly with a standard deviation of 121. October’s sales of 782 townhomes may not seem like a lot but it is actually over 3.1 standard deviations away from the 10 year average of 399! This is significant and means that 99.7% of the monthly townhome sales would be lower! This shows us that the recent shift in buyer behaviour – looking for more space – is significantly affecting the real estate market.
ASIDE: There are – of course – other factors that are driving an increase in sales – including low interest rates, banking confidence, recent government measures to try to regulate insurance premiums, etc. However, these factors would tend to drive up sales across the board not townhomes specifically.
October homes sales is the 2nd highest on record in 10 years.
In October, there were 3,687 home sales, an increase of 29.0% ▲ from last year and a slight increase 1.2% ▲from last month. Sales peaked standing at the 2nd highest October on record 34.7%▲ above the 10 year seasonal average.
The total inventory of homes listed for sale on the MLS® system in Metro Vancouver was 12,416 a 1.5% ▲ increase compared to last year and a 2.6% ▼ decrease compared to last month.
There were a total of 5,571 newly listed properties for sale across Metro Vancouver in October 2020. This represents a 36.7% ▲ increase compared to last year and a 13.0% ▼ decrease compared to last month. This was 26.6%▲ above the 10-year October average.
Overall October benchmark prices of homes have increased.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently
$1,045,100. This represents a 6.0%▲ per cent increase over last year and a 0.4%▲ per cent increase compared to last month.
The benchmark price for a detached home is $1,523,800, a 8.5% ▲ from last year and a 1.1% ▲ compared to last month.
The benchmark price of an apartment is $683,500, a 4.4% ▲ from last year and unchanged 0% ▼ compared to last month.
The benchmark price of an attached home is $813,000, a 5.4% ▲ from last year and a 0.4% ▲ compared to last month.
Sales to Active listing ratios
The sales-to-active-listings ratio is defined as the number of home sales divided-by the number of listed homes during the month.
For all property types, the sales-to-active listings ratio for October 2020 is 29.7%.
By property type, the sales-to-active-ratios are:
Detached Homes: 30.9%
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.