I see the housing market in BC continuing to be stronger in 2020 and I expect we may go back to a more typical year of home sales as markets recover from the policy-induced slowdown of the past two years.
I follow the market closely in greater Vancouver as a higher percentage of my buyers move from the Lower Mainland and look to Nanaimo and area for properties. The Vancouver market was up more than 42 per cent year-over-year however prices are still lower than they were a year ago. Even with increased sales and tightening in supply, prices remain lower than at this point last year. There are significant signs of growth though over the last several months.
The British Columbia Real Estate Association reports that a total of 4,426 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in January 2020, an increase of 23.7 per cent from the 3,579 units sold in January 2019. The average MLS® residential price in BC was $725,370, a 9.1 per cent increase from $664,633 recorded the previous year.
In the Vancouver Island Board area sales of single-family homes in January dropped by 16 per cent from one year ago and were 26 per cent lower than in December.
Last month, 174 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 235 in December and 208 one year ago. Apartment sales in January decreased by three per cent year over year, while the number of townhouses sold dropped by 18 per cent from one year ago.
Inventory of single-family homes last month rose slightly from one year ago (981 to 992) and increased by six per cent from December 2019. Active listings of apartments rose by three per cent (299 to 309) year over year, while townhouse inventory dropped by 24 per cent (165 to 125).
The benchmark price of a single-family home board-wide was $515,400 in January, a four per cent increase from one year ago and marginally lower than in December. (Benchmark pricing tracks the value of a typical home in the reported area.) In the apartment category, the year-over-year benchmark price rose by five per cent, hitting $309,300, which is two per cent higher than in December. The benchmark price of a townhouse last month rose by three per cent year over year, climbing to $408,600, and was virtually the same as in December.
Regionally, the benchmark price of a single-family home in the Campbell River area last month was $437,300, an increase of four per cent over last year. In the Comox Valley, the benchmark price reached $521,900, up by four per cent from one year ago. Duncan reported a benchmark price of $478,000, an increase of three per cent from January 2019. Nanaimo’s benchmark price rose by four per cent to $562,700 in January, while the Parksville-Qualicum area saw its benchmark price drop slightly to $571,400. The cost of a benchmark single-family home in Port Alberni reached $328,900 in January, a 10 per cent increase from one year ago.
Trend wise, inventory is tightening again, which is one of the factors behind weaker sales. I am seeing multiple offers with a recent sale having over 5 offers on it. This is price specific and is happening more in the $400,00 to $500,000 range.
“The stress test is compressing more demand into our mid and lower-priced property market."
I believe 2020 will be a more stable market and with no outlook for banks to increase rates and the reduction on qualifications of the stress test will balance things out more evenly.
For Condo buyers and older buildings, the new insurance requirements will present some additional obstacles and it is too soon to see how that will affect buyers and sellers wishing to make a move. For more information about how you could be affected by the increase in the BC Strata Insurance Rates visit our blog post here.
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