Everyone has a question they get based on their occupation. You know the one…
“Hey Dr. Mike, can you look at this rash. Whaddaya think?”
“Hey Paul, you work on cars can you tell me what this clanking is?”
“Hey Chris, you’re a lawyer, can my boss make me… without paying me more?”
The typical question asked of those in Real Estate is “How’s the market?” The short answer… “Lots!” The long answer starts with a question. “What part of the market?” The buying and selling of homes is generally referred to as “The Market” yet there are so many different aspects to it. Start with geography. What’s happening in North Vancouver is not the same as Vancouver which is also different from Burnaby, South Surrey, Langley, etc. You then you have to look at what segment you are referring to, single-family or multi-family, then break them down further, pre-sale, re-sale or standing inventory. Each one of these is a completely separate market.
The “pre-sale market” is where homes are sold by a developer, well in advance of being able to move in. Typically these are concrete towers, low-rise wood frame or townhome projects that can be 6 months to 2+ years from completion. The pre-sale market will suit a buyer who needs a home or rental property in the future but does not need a residential solution immediately.
The “re-sale market” is where homes are bought from the individual that has been living in the home. The buyer of a re-sale is looking for a quick solution with a 1 to 4 month closing.
The “standing inventory” market is where a purchaser will be buying from the developer but this home is complete and ready to be occupied. These can be occupied quickly in less than 30 days, but can also have a similar close timeline to the re-sale market.
The single-family market (primarily re-sale) has been going particularly crazy on the West Side and North Shore for the past month. Many sales are with multiple offers and generally over asking prices. Take the craziest example I know of, 906 W 20TH Ave, Vancouver which sold for $1,611,000, $523,000 above asking price and it’s a tear down! This home received 30 offers in 10 days on the market. The single-family market is doing well due to low inventory and high demand. But this is not true of every community. Pre-sale projects in communities generally thought of as “good markets” are not seeing similar sales. For example, the North Shore, where single-family prices are up and multiple offers are the norm right now, a recently launched concrete high-rise tower in a prime central location is said to have sold 30% to 35% of their inventory in the past 4 months. Not what you would expect when the single family re-sales are very busy. Then again, the low rise projects on Marine Drive in North Vancouver have sold well into 50% and 60% of their inventory in the same time frame as the tower noted above. What’s the difference? The “specific market” being single-family versus re-sale, versus pre-sale concrete, versus pre-sale wood frame low-rise.
In a recent discussion with Jeff Hancock of MPC Intelligence about this very issue, he mentioned an example of his findings on the North Shore. What MPC found was that the ground floor oriented homes (single-family and townhomes) have seen much stronger sales than low-rise with high-rise following behind both.
The team at MPC has just finished a 4 month market study that has affectionately become known as the C-MOP report (Metro Vancouver Condominium Opportunities Report). This is a report, covering 13 market areas in Metro Vancouver, and has looked at every product type. If you really want to know what’s happening in the market, contact MPC to learn how you can purchase the C-MOP report.
So, if you ask me “How’s the market?” I would say…
The re-sale market throughout Metro Vancouver is doing well. Sales and prices are up all over Vancouver. However, listings are starting to climb while the number of buyers is too hard to track. If you’re a seller do the deal now. If you’re a buyer… maybe wait a bit if you can.
The standing inventory market is not bad. This market has some stars (selfish plug for my Inter Urban project in New West (www.interurbanliving.ca) where we have sold over 50 homes since September and have recently raised prices) and some projects are struggling, usually due to holding on to pricing that buyers do not accept.
The pre-sale market is a bit sluggish right now but is starting to pick up. In the next 12 months MAC will be releasing 11 brand new projects. Both MAC and our clients feel that there is strong demand for the pre-sale market. This should hopefully mean those projects already on the market will start to see greater sale activity. Our traffic has picked up across the board and we believe sales are not far behind.
If you’re an investor and interested in picking up a copy of the C-MOP report you can contact MPC and purchase it directly from them. Remember to also visit the MAC projects page for more details and to keep up on the coming projects.
Dan Thomson
