Metro Vancouver's real estate market showcases its resilience as May records over 5,000 transactions, a milestone not seen since March 2022. Despite the unusual surge in activity during the late Spring market, this increase reflects buyers' renewed optimism. In addition, they are displaying a remarkable willingness to navigate higher interest rates and elevated prices, underscoring their determination to enter the market and capitalize on the limited opportunities available. 

THE (NOT SO) LITTLE ENGINE THAT COULD

Rather than fizzling out, Greater Vancouver's real estate market has continued to build steam, gaining momentum as we transition into the summer market. Prices continue to trend upwards – May marks six consecutive months of appreciating benchmark values. Residential home sales in the region reached 3,411 in May 2023, reflecting a 15.7% increase compared to May 2022. The market remains active despite a slight decline of 1.4% from the 10-year seasonal average. 

Andrew Lis, REBGV's director of economics and data analytics, expressed surprise at the significant price increase: "Our forecast projected modest price growth of around two percent for 2023. However, home prices in Metro Vancouver have already surged by approximately six percent across all property types at the halfway point of the year." 

The number of newly listed properties for sale in May 2023 decreased by 11.5% compared to the previous year, with a total of 5,661 detached, attached, and apartment properties listed on the Multiple Listing Service® (MLS®). The current inventory of homes listed for sale on the MLS® system stands at 9,293, representing a 10.5% decrease from May 2022. 

The sales-to-active listings ratio for May 2023 is 38.4%, indicating a high demand relative to the limited supply of homes. Detached homes have a ratio of 28.5%, while townhomes and apartments show ratios of 45% and 45.5%, respectively. Historically, when the ratio falls below 12%, downward pressure on home prices is observed, while ratios above 20% indicate upward pressure. 

Lis emphasized the supply-demand imbalance as the main driver of price increases: "The fundamental issue remains that there are more buyers than willing sellers in the market. This scarcity of resale homes continues to keep the supply short." 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,188,000, indicating a 5.6% decrease compared to May 2022 but a 1.3% increase from April 2023. 

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THE FRASER VALLEY RESALE MARKET CONTINUED TO SURGE IN MAY, DRIVEN BY RETURNING BUYER CONFIDENCE FROM THE HEELS OF STEADY INTEREST RATES

Across the board, metrics saw positive month-over-month increases - a bullish sign relative to previous years that saw the typical Spring cycle beginning to cool by May. Overall, 1,711 sales were processed, a 10.1% increase over the last month and a 25.8% jump over the previous year.  

While sales activity has been steadily gaining over the past three months, the notable difference in May was a significant influx of inventory. As a result, the market recorded 3,533 new listings - just below the previous year's levels but 2.7% higher than the 10-year average. The increase in listings represents a welcome change for a market challenged by a severe lack of supply. Moreover, it indicates a beginning to the end of the "holding pattern" that has characterized buyer/seller behaviour over the past quarter.  

Despite gains in supply, there remains a distance to be covered before matching the robust demand currently present in the market. The overall sales-to-listings ratio remained at an elevated 35% in May, indicating a tight seller's market. In addition, average days-on-market saw significant drops, from an average of 33 days in January to just nine days in May.  

These dynamics have contributed to the fourth consecutive price increase of 2023, with the MLS® Home Price Index composite benchmark pricing increasing approximately 1.8% month over month.  

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VICTORIA REAL ESTATE MARKET SHOWS STEADY GROWTH, INCREASED INVENTORY, AND BUYER OPTIMISM IN MAY 2023

The Victoria Real Estate Board reports a steady growth in the spring market, with 775 properties sold in May 2023, marking the highest number of sales since April of the previous year. Single-family home sales increased by 8.7% compared to May 2022, while condominium sales experienced a slight decrease of 0.8%. At the end of the month, there were 2,189 active listings, a 7.1% increase compared to April and a 23.3% increase compared to May 2022. With an uptick in inventory, buyers have more selection, but supply conditions remain tight, with an overall sales-to-listings in the market at 35.4%.  

The increase in sales and inventory reflects consumer confidence and optimism in the market. Still, if the supply shortage persists, there is a risk of an overheated market with pricing pressures. The benchmark values for single-family homes and condominiums in the Victoria Core area, however, did decrease in May, indicating a more balanced market for buyers compared to what we see in the Lower Mainland. 

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