Market Update October 2022: What is Really Going on in the Market?

Hi everyone, I’m James Garbutt. And I’m Denny Dumas. And this is the Garbutt Dumas Real Estate Podcast.

Denny: Sales volumes dropped Monica. Is the sky falling? 

Monica: Absolutely. No. No, it’s not.

Denny: That’s it. End of podcast. The sky’s fallen. That’s it.

Monica: I don’t know, certain areas are really busy and certain areas aren’t and it kind of depends what product it is and of course like always listing price, values, expectations. A lot of the areas that, that we work in are experiencing a kind of a variety of, of themes right now, when it comes to busyness. I think you know for us areas like the Tri Cities have just stayed busy, they went through a little, a little point in time where it was seeming really slow but there just wasn’t much on the market for you know, buyers still looking and there just wasn’t anything for them to buy. Now there’s a little bit more inventory and we’re seeing a lot of action in the Tri Cities, a lot. Mostly in the you know, $800,000 range for townhomes up to like the $1.5 $1.6 range for detached anything in that range is like flying off the shelf if it’s decent. Even if it’s not in some cases. Yeah, New West is the same, New West detached if it’s, if it’s good and doesn’t need a bulldozer, it’s selling.

Denny: Overall sales to active listing ratios are down across the board in Greater Vancouver. We had unsustainable numbers in 2021 and saw that kind of activity in 2017 too. I would say almost surprising how active a lot of products are and there’s definitely been an adjustment in price points from January, February, March of 2022 to today with interest rates climbing what? 3.5% something in that range. In a very short period of time, you would assume that consumers are a bit fearful and typically we see a pickup in activity after Labor Day long weekend through September-October. And that has absolutely happened again. In a lot of markets that we work in, like a good home priced correctly is getting multiple offers almost all of the time. 

Monica: I mean, there was a home that was listed yesterday. So as of last night, zero days on market in Coquitlam. And I asked the agent if I could see it today at 11 and he’s like sure but with showings all day today and we’re looking at offers tomorrow at six because we already have received so many offers and they didn’t have an offer presentation day plan because he had no clue that it was going to be this busy. I mean this was yesterday and it had zero days on market and went into multiples. I mean looking at the stats, the real estate board put out what was out a few days ago a day or two ago. I mean areas like Richmond are performing really, really well. Like high detached benchmark pricing. High townhouse benchmark pricing. High condo benchmark pricing. West Vancouver of course is doing really well. East Vancouver is doing really well. Port Moody is way up there. I think the only Whistler, West Van and Richmond have higher detached prices than Port Moody and that’s it.  Like there’s a lot of places that are performing really really well and don’t have a lot of inventory on market. So inventory is not building up. But the ones that are sitting are you know lots. Lots are sitting. Investment property like you know prime for a bulldozer that’s sitting because nobody wants to develop property right now. And when I say sitting I mean if it’s priced correctly, those are still selling too. 

So it’s been a, it’s been a pretty exciting Fall so far. I think we kind of partially predicted that that would happen because it was just so slow and we all know that the Vancouver real estate market is a unicorn and it’s very resilient and there’s a lot of people that want to purchase property and when there’s nothing available over a period of time, every time what happens is you have a buildup of buyers. And we have this hilarious mob mentality in Greater Vancouver that once we see one property go into multiples, everybody panics, and I really kind of feel a little bit of that right now. I have buyers that are feeling that right now.

Denny: It’s been a strange six months with interest rates climbing but I’d say the most surprising thing for me is that we haven’t seen inventory numbers get out of whack. Inventory numbers and a lot of neighborhoods are still below the 10 year average, which to me is quite surprising. Activity in terms of sales numbers over say May to July-August were quite slow across the board like down 30, 40% from where they are in a typical year of that, in those months. And that that typically means inventory numbers start building up and we didn’t see that and we still are not seeing that. So as soon as activity in terms of buyers confidence comes back, which it seems like it’s starting to in the last few weeks. We’re seeing these types of situations where good homes priced correctly, are getting 25-30 showings and they’re selling in seven days. 

Monica: Yeah, I would say one thing is like “Be easy on your realtor” if you’re a seller, because the market has been a little bit unpredictable in the last like four to five months. So if you just ask, we get this question all the time. Well, what is this worth? Well, I mean in the last two weeks if I’m only looking at inventory from the last two weeks, it’s worth this but if I’m taking into consideration, the last four months, it could be this but if I’m taking into the last 12 months, it could be this. So it’s a little bit of a rocky road. So I would say you kind of have to take it day by day and you need to look at each property really, really individually and scrutinize really small pockets of the market and the neighborhoods to kind of determine prices and price points. And I mean we spoke with a seller a few weeks ago Denny and I, about a condo in New West. And at that time there was two properties like exactly like it that had been on the actually a little bit better. Two properties a little bit better that had been on the market 60 days in 100 days, and those like, lucky us, sold like days, like a day before we listed ours. After 60 days and 100 days on market and we got an accepted offer within five days or four days. 

Denny: We got multiple offers.

Monica:  Yeah, we got multiple offers. An accepted offer after four days and, and we’ve priced high because our seller wanted a lot. So it’s yeah, if I, if we looked at the last four months, we would say okay, well at this price, we could be on the market for 90 days like that’s what the stats are telling us but that just wasn’t the case.

Denny: It’s not everywhere. I think Monica mentioned a few neighborhoods that are really, really active still. And Richmond, is probably been one of the more resilient neighborhoods in all of Greater Vancouver in the last six months.

Monica: I’d say that property prices are like steadily climbing in that area.

Denny: Totally. They are. For all product types too. Single family is nuts in Richmond right now. North Vancouver, still very, very busy. East Vancouver still very, very busy and a lot of the Tri Cities is still very active. We’ve in Tri Cities we’ve seen prices come down slightly in the last six months but activity has not really subsided much. When you move out to the Fraser Valley or on the other side of the river in Pitt Meadows, Maple Ridge, the activity levels are much slower and we are seeing more inventory out there. Those were the areas that were the potentially the busiest through 2021 where we saw the biggest jump around COVID in price points and those have probably been hit the hardest in the areas that we work anyway of a price points. Their price points have come down and their inventory has built up a little bit so it is, it’s more buyer friendly in the Fraser Valley and Pitt Meadows, Maple Ridge than it is on this side of the river. And I don’t really see that changing much in the next few months. Because usually this time of year we start seeing middle October towards the end of December we see inventory levels drop even more. A lot of people put off the real estate game until the New Year. And it doesn’t seem like buyer activity slowing down.

Monica: No It really doesn’t. I think that’s always kind of there’s so many ingredients that go into the climate of the market and one of course is climate and it’s been a really beautiful Fall. So buyers are out there enjoying continuing to look at properties and going to open houses and I really do think that that has impacted the market. Our, our listings still look really beautiful when we photographed them in October versus years in the past even last year, it rained the entire month of October. So it wasn’t great. So I do think that that plays a big, at least a portion, it plays a portion of it. But there are definitely people out there. I mean, I talked to realtors all over the city all the time. And if you talk to them in August, July or June, they would say that they had like one person at their open house or none. But then now they’re having active open houses with you know, at least 10 to 20 people through of properties that are priced with integrity. Yeah. So I think that and this is all over the city, even in kind of slower like Vancouver proper, like the city of Vancouver is a little bit slower than some of the more desirable neighborhoods. But it’s, it’s still active. I think that’s the important thing everybody in the market is dead and I don’t know where that information is coming from.

Denny: Seems like the media is always three to six months behind. So potentially that’s coming from the media talking about June, July, August, which were quite a bit slower. There wasn’t a lot of good inventory though. Like I think a lot of sellers saw interest rates climbing, and they’re just like “Let’s see how this plays out”. Because there was a lot of, there was a lot of, you know, homes that need work when homes on busy streets that were listing and we just weren’t seeing a lot of good products.

Monica: Yeah, for sure. I mean, I had a detached home list that we had 40 people through in July, at their open house and they got no offers. So that was really surprising. And now we’ll have maybe 10 people through and get an offer.

Denny: I think in these transitioning markets you, you need to launch it, the importance of picking the right list price out of the gates just super important. And if that is slightly conservative or you that you feel as a seller is slightly low. The market is going to tell you that. And that’s what we’re starting to see with, with not a lot of inventory of homes is that the homes that are pricing conservatively slightly, you know, maybe it’s worth $1.45 to $1.5 but their pricing $1.399 Those ones are getting, those ones are busy getting multiple offers like the Coquitlam home you said yesterday, and they’re selling fast. Versus if you’re pricing $1.55 to $1.6, you’re probably sitting for the rest of the year and being very frustrated with that experience.Monica: Right, Yeah. Always, always price is important. But yeah, the market’s been surprisingly active. I think we, we thought it would be just based on how slow we were in how many buyers we knew needed to buy places but it’s been kind of exciting to see. And when I say exciting, I mean, it’s a really fun story to watch the Vancouver real estate market, it’s really, we defy all odds. I follow so many Realtors on social media, and they’re all posting things in different areas like all over Canada and the US posting things about how slow the markets are in their in, their market centers and it’s not what we’re experiencing here. It’s just an interesting market.