The month of January was pretty crazy as far as weather goes compared to the last 5 years. The last time we saw this much snow in Vancouver was in January of 2009. I personally love the snow and waking up to a fresh snowfall and seeing the look on my son’s eyes as he looks out to a winter wonderland is priceless. Yet, when it comes to real estate, snow plays a factor on how the Vancouver real estate market performs. Some buyers and sellers wait for the snow to melt and this can result in fewer sales. My last market review for the month of December 2016 talked about the downward pressure on detached house prices and a very active seller’s market for condominiums and townhouses. When analysing all the data for January 2017, the numbers and information indicate that the real estate market has slowed down from the previous month of December for both detached houses and condominium and townhouses. The data indicates a continuing trend of downward pressure on detached houses with the condominium & townhouse sector slowing in what was previously a very busy market below $1.7 million dollars. Even with the reduced activity in the condominium and townhouse sector, it still remains a seller’s market. The biggest change in the past 30 days is the volume of sales being lower and the number of listings increasing. It is important to note that there is year over year trend for sellers to take their properties off the market over the Christmas holidays and then relisting in the early days of January. This is where the snow may also come into play when it comes to the total number of sales as buyers were simply not motivated with all the snow that accumulated. This may also be why we saw the volume of sales drop in all sectors of the market for the month of January 2107.
Let’s compare December’s 2016 volume to January 2017 sales volume for both detached and attached Vancouver real estate.
Vancouver Detached Houses (*Absorption Rate)
Area | December 2016 | January 2017 |
Vancouver West Side | 19% | 7% |
Vancouver East Side | 13% | 9% |
North Vancouver | 32% | 16% |
West Vancouver | 13% | 6% |
*Absorption rate is calculated by taking the number of homes that sold in a month and divide it by the total number of homes for sale at the end of the month.
0- 14% Buyer’s market 15% – 20% Balance market 21% plus Seller’s market
Vancouver Condominium and Townhouses (Absorption Rate)
Area | December 2016 | January 2017 |
Vancouver West Side | 45% | 32% |
Vancouver East Side | 77% | 40% |
North Vancouver | 100% | 47% |
West Vancouver | 27% | 30% |
Downtown | 50% | 30% |
The drop in absorption rates is very noticeable in both the detached and attached sector with the exception of West Vancouver. The condominium and townhouse market remains a seller’s market but the data may indicate slower first quarter than I previously forecast in my last market review. I think it is important that we don’t jump to any conclusions at this time. We will need the month of February to get a better understanding of the above numbers. You have to bring two factors into the equation and those are that January is the beginning of a new year and many buyers have yet to actively start the process of purchasing and the other factor of a heavy snowfall. The snowfall may sound like a wild card but if you go back over the decades it does play a factor in reducing activity.
Let’s look at January’s market activity by type and price range.
Vancouver West Side Detached Houses
There was good activity up to 2.7 million dollars with a total 47 listings and 16 sales resulting in an absorption rate of 34 percent which indicates a seller’s market in this price range. That being said, buyers will walk right past any overpriced listings. There were a total 282 listings priced between 2.8 million to 5 million dollars with a total of 16 sales which resulted in an absorption rate of 5 percent absorption rate. The 5 million dollar and above price range had a total of 208 listings and 5 sales resulting in an absorption rate of 2 percent which is incredibly low. The neighbourhood with the most sales was Point Grey followed by Dunbar. I am curious to see if the recent amendment to the Foreign Buyers Tax will positively affect the 3 million dollar and up price range. It will take a minimum of 3 months to get a proper answer to this question.
Vancouver West Side Condominiums and Townhouses
This market continues to be very active right up to 1.7 million dollars. The absorption rate has dropped but I expect this to positively increase over the next 60 days. The only factor that could stall the activity in the next 60 days is if we see a spike in the number of listings offered for sale. Once you visit the 1.8 million dollars and above price range it’s a whole different animal. There was a total of 43 listings priced above 1.8 million dollars and only 2 sales. The luxury condominium market is radically different from the market priced under 1.7 million dollars.
Vancouver East Detached Houses
The activity is good up to 1.75 million dollars with a total of 212 listings and 45 sales resulting in a 21 percent absorption rate. Once we get above 1.75 million dollars the market slows with only 7 sales out of 373 listings. The upper price category is driving the overall absorption rate down to 9 percent which indicates a strong buyer’s market, hence it is important to isolate the price categories to get a clearer view of the East Side Detached housing market.
Vancouver East Condominiums and Townhouses
The activity has slowed a little from December of 2016 but remains a seller’s market up to 1.5 million dollars. Good properties priced between $300,000 to $400,000 are selling within 10 days of being listed and at times with multiple offers. The only factor that will take the momentum out of this market is a rise in interest rates and/or an increase in the number of listings offered for sale. We often see the number of listings increase as we approach March so it is possible for the positive momentum to slow.
North Vancouver Detached Houses.
The activity is good up to 1.7 million dollars and then slows significantly from 1.8 million dollars upwards. There were a total 55 listings and 22 sales between 1 million to 1.7 million dollars resulting in an absorption rate of 40 percent which is a seller’s market. From 1.8 million to 12.8 million dollars there were 151 listings and only 11 sales. The most active neighbourhood was and continues to be Lynn Valley.
North Vancouver Condominiums and Townhouses
The activity is very good with an absorption rate of 47 percent. The majority of listings are priced under 2 million dollars and all price ranges are performing well. The North Vancouver condominiums and townhouses remains a strong seller’s market.
Downtown
The Downtown condo and townhouse market were very busy up to 1.5 million dollars. Professionally marketed condos that are accurately priced are selling quickly and at times with multiple offers. There is a lack of listings offered for sale and until supply increases, we can expect a busy downtown condo market to continue.
Downtown January Condominium and Townhouse Absorption Rates by Area.
Coal Harbour 37%
Downtown 34%
West End 17%
Yaletown 27%
Vancouver Real Estate Market Summary for January 2017
The sub 1.7 million dollar price ranges are performing very well but pricing is critical. Buyers are very sensitive to downward pressure on property values and are in no rush to purchase. Professional marketing is also very important. Many buyers are not taking the time to view a listing that is poorly displayed online. I am always amazed when I see a new listing in a good area that lacks photographs or professional photographs and other pertinent detailed information.
To get a general overview of a professional marketing plan visit my website page Sellers.
If you would like more specific real estate information contact me by telephone or email. I am always available to answer any questions.
Written by Don Urquhart – Vancouver real estate agent since 1987