To sum it up in one sentence would be downward pressure on prices. The next question that usually follows is…
How much have prices dropped this year?
Prices started to decline in June of 2022. Single-family detached house prices have dropped by approximately 20 percent, townhouses have dropped by approximately 10 to 15 percent and condos have dropped by approximately 3 to 5 percent. The next question that usually follows is…
How much farther will prices drop?
To sum it up in one sentence as long as interest rates and lending rates continue to rise housing prices will continue to decline.
If prices are falling why are people still buying real estate?
Because rents are insanely high with no signs of getting cheaper. More importantly, owning good real estate over a long period of time is the safest and best investment a person can make. Interest rates are still low at 4.79 percent for a 5-year fixed term. I was a real estate agent in the late ’80s and interest rates were 15.2 percent and I was putting on a suit and tie 5 days a week to make my appointments (a suit and tie was standard dress back then…before the dot com execs changed the business attire forever). If a buyer is investing in a good property to call home or rent out for a minimum of 5 to 7 years then there is very little risk if any at all. I have a faithful client that bought their first house through me in 1987. They continued to buy good real estate with me over the highs and lows of the Vancouver real estate market over the decades. Their business philosophy was it always had to be a minimum of a 10-to-15-year hold. The first house they bought through me was a single-family detached house on a 33-foot lot in East Vancouver for 51,500 dollars. As of October 20th, 2023 their property holdings are approximately 74 million dollars. Last but not least people want a place of their own to call home.
Is it any different buying real estate today as opposed to the last three years?
Absolutely yes! And I can not sum it up in one sentence but feel free to call me on this matter (604 787 1210). With 35 years of experience and many travels down the road of declining prices etc. a buyer, today needs an experienced realtor who listens, understands and knows how to navigate the changing conditions.
Written by Don Urquhart – Macdonald Reatly