The last 60 days have reinforced one of the most important things about today’s Greater Vancouver real estate market: buyers are very sensitive to price.

Sales remain unusually low. In August, Greater Vancouver sales were 20.7% below the 10-year August average. At the same time, active listings remained 26.2% above the 10-year average. Prices continued to move lower, but gradually rather than falling sharply.

There are also signs that the market may be starting to settle in some areas. New listings fell faster than sales in August, townhouses remained the strongest major property type, and North Vancouver continued to outperform Greater Vancouver. But there is still not enough evidence to say the overall market has turned around.

The bigger story is that there is no single Greater Vancouver market right now. Property type, location and price all matter.

Insights for Buyers

For buyers, there is a lot to like about the current market. Sales are low, inventory remains above normal, and prices have been drifting down. That generally means more time to compare homes and more choice than buyers had during stronger markets. Greater Vancouver detached homes had the weakest sales-to-active-listings ratio in August at 9.6%, compared with 13.7% for apartments and 15.1% for townhouses.

But the opportunity changes depending on where and what you are buying. North Vancouver is a good example. Its overall benchmark was up 2.0% over six months, while Greater Vancouver was down 1.7%. North Vancouver detached homes were even more resilient, rising 2.8% over six months while Greater Vancouver detached fell 2.0%. That is a large difference between the regional market and one local market.

Insights for Sellers

For sellers, fewer competing listings do not automatically mean stronger prices. North Vancouver showed this very clearly in August. Inventory was lower than a year earlier across detached homes, condos and townhouses, yet benchmark prices were also lower in all three. Homes also took longer to sell. The lesson is simple: buyer demand still matters, and pricing still matters.

Condos are especially worth watching. North Vancouver's condo benchmark dropped from $785,700 in July to $770,300 in August, a decline of about 2% in one month. That was the clearest short-term price weakness among North Vancouver's three main property types. However, it is important not to turn one month into a larger trend: North Vancouver condos were still up 0.2% over six months and continued to outperform Greater Vancouver condos over the longer six- and twelve-month periods.

Market Outlook

There are some interesting signs heading into the fall.

Townhouses continue to stand out. In North Vancouver, townhouse sales increased 26.1% from a year ago, inventory was down 5.5%, and the sales-to-active-listings ratio reached 21.2% in August. The benchmark also increased 0.8% from July. That is much stronger current activity than we are seeing in condos or detached homes locally, although townhouse prices are still 3.1% below last year.

At the Greater Vancouver level, the picture is less encouraging. Sales remain very low, prices are down across all three major property types from a year ago, and there is not yet broad evidence of a recovery. What we are seeing instead are small pockets of strength inside a generally soft market.

What does this mean?

The last 60 days have made one thing increasingly important: you need to know which market you are actually in.

Greater Vancouver is soft overall. Detached homes currently have the weakest regional supply-and-demand numbers. North Vancouver detached homes have been much more resilient. North Vancouver condos had a sharp August price decline. Townhouses are showing relative strength. West Vancouver continues to show significant weakness over longer periods.

Those differences can create opportunities.

A buyer may have much more negotiating power in one segment than another. A seller may be competing in a market where buyers have many choices. And someone selling one type of home to buy another needs to look at both sides of the move, not simply whether home prices are up or down.

For example, in North Vancouver the benchmark price gap between a townhouse and a detached home has narrowed by about $37,100 over the past year. For some townhouse owners hoping to move into a detached home, that change may work in their favour.

The market is still price-sensitive, and buyers are still selective. But that does not mean there are no opportunities. It means the opportunities are becoming more specific.

Davis Kosowan, REALTOR®

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