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Real (Estate) Talk with Ryan Berlin - March 2021

 

Mar 15, 2021

Written by 

Ryan Berlin

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The rennie review is produced each month by rennie intelligence, which includes the latest real estate data for Vancouver Region's housing market.

historically-high buying activity continues, but for how long?It is often said there are two sides to every story. This notion can be expanded on when applied to stories told using data, as data is not inherently truthful; indeed, a single data set can reasonably be used by one story-teller to share their particular perspective on an issue, while simultaneously being used by another to promote an opposing view.

With this in mind, it is notable that the latest MLS sales data for the Vancouver Region leave little room for divergent views on our current market dynamics. In summary, the 6,426 sales through the Greater Vancouver and Fraser Valley board areas in February 2021 were the second-most in any February in the region’s history, only 2% shy of the all-time February high achieved during the days of marked market exuberance back in 2016.

February’s sales were also 89% higher than those from one year ago, and they were 69% higher than the past-decade February average. Furthermore, and again compared to long-run averages, detached homes sales last month were up 47%, condo sales were up 73%, and townhome sales were more than double their typical level--up 110%.

But surely there must have been areas within the Vancouver Region whose experience was different from the region’s as a whole, yes? Not really. With the exception of Burnaby East, where the number of townhome sales fell from 12 in February 2020 to 9 in February 2021, year-over-year and month-over-month sales counts increased for every home type in every area in the region. The notion of elevated demand is real, and spectacularly true.

With new listings not keeping pace with sales, resale inventory remains suppressed, down 19% in February versus one year earlier, and down 32% versus the past-decade February average. And while it’s worth noting that total condo listings were 3% higher last month than they were a year ago, they remain 13% below the long-run average.

As is always the case, the product of the dynamic between supply and demand is prices, which--in our current context--are rising at an unsustainable pace. Most notably, the benchmark detached home price was up 17% in February on a year-over-year basis, having risen 4% over the past month.

These conditions will not persist indefinitely. More pointedly, while we do not see any real reason that supply will expand any time soon (rising prices do not constitute a sufficient condition for expanded listings, as someone who sells their home typically must then buy their next home), demand is likely to recede somewhat as the year progresses, with all of early-2020’s pent-up demand now unpent and mortgage rates beginning to rise from rock-bottom lows. This is the heretofore untold story of our market, but one we will be watching closely as it reveals itself over the coming months.

Our rennie intelligence team comprises our in-house demographer, senior economist, and market analysts. Together, they empower individuals, organizations, and institutions with data-driven market insight and analysis. Experts in urban land economics, community planning, shifting demographics, and real estate trends, their strategic research supports a comprehensive advisory service offering and forms the basis of frequent reports and public presentations. Their thoughtful and objective approach truly embodies the core values of rennie.

Written by

Ryan Berlin

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Disclaimer: This representation is based in whole or in part on data generated by the Chilliwack & District Real Estate Board, Fraser Valley Real Estate Board or Real Estate Board of Greater Vancouver which assumes no responsibility for its accuracy.

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