Summer 2008 Market Update
The MLS stats on the detached market read very similarly to those for condos. Homes at the lower half of the price spectrum are taking approx 60 days to sell and closer to 90 days for the upper half. The number of listings vs sales also point to a very balanced market. However, from my view in the trenches I believe there are some underlying differences which will begin to more evident over the next year or two and could work in favour of detached homes. The value of land may well become a bigger factor again as the market returns to normal and buying a piece of “dirt” anywhere in the city of Vancouver could prove to be your best protection from oversupply. Getting back to basics and buying the most limited commodity of them all – land – could be the best way to protect your investment. The massive population growth still forecast, severely limited road infrastructure and natural geographic boundaries of the city determined by the mountains and water, all combine to form a very special set of conditions which do not exist in any other city in North America.
It has been an interesting spring. The official stats continue to support the idea of a balanced market with price increases in the 11% range versus the same time last year. However, in the trenches things look a little different. Under $500,000 the demand is still easily keeping up with the supply. However in many other price ranges, there are now an increasing number of listings and the average length of time on the market is growing. What I perceive is a market trying to find its level. Currently a large portion of the Downtown condo market is beyond the reach of local residents, so one of two things will happen. In a similar way that I spoke about the Westside house market in the last issue, either the prices Downtown will hold and it will become primarily the domain of the International market, or if there aren’t sufficient numbers of out of town buyers to support the supply, the prices will have to come down to allow local buyers to re-enter the market. Either way, once the new price point is established, all the economic indicators suggest there will be enough strength to allow steady growth to continue in the coming years.