Real (Estate) Talk with Ryan Berlin - August 2022

The rennie review is produced monthly by rennie intelligence, including the latest real estate data for Vancouver Region’s housing market.

With summer now in full swing—the kids are out of school and Vancouverites are travelling in large numbers—our local housing market conditions continue to evolve in predictable ways. Specifically, MLS activity on both sides of the supply and demand ledger was down in July, as would-be sellers and buyers hit pause after a frenetic two years of activity and recently rapidly rising interest rates to spend more time at parks, on patios, and on planes. The result of this slowdown in activity is that overall market conditions no longer favour sellers (or buyers) for the first time since May 2020.\

So how did we get to this currently-balanced market? Certainly, and most simply, the biggest factor is declining sales counts. Overall sales in the Vancouver Region declined 23% in July when compared with June, were 46% below the total from July 2021, and were 38% lower than the past 10-year July average. In fact, the 2,850 sales last month represent the lowest total for July in more than two decades, going all the way back to the year 2000. And while sales counts were down substantially across each product type, demand for detached homes sagged the most, with the 877 sales in July lower by 54% than the past 10-year average, while townhome sales (480) and condo sales (1,421) were 44% and 17% lower, respectively.

As noted, however, sales weren’t the only metric on the decline in July. After six consecutive months of increases, total listings decreased last month to 15,975, a 2% drop. Inventory remains well below the historic norm for this time of year, with July’s total listings finishing 17% below the past 10-year average for the month. Notably, inventory declined even as sales counts waned, as new listings in July (that is, the number of listings added to existing inventory) were, at 6,129, the lowest recorded for any July since 2002. 

All of this has nudged overall market conditions into balanced territory for the first time in more than two years, as the sales-to-listings (S-L) ratio for July came in at 18% (anything between 12% and 21% is considered a balanced market). The situation facing each of the individual home types, however, differs. The detached home segment, for instance—the first segment to achieve balance back in May—now favours buyers, with its S-L ratio of just under 12%. Townhomes, meanwhile, are demonstrating balanced conditions, with an S-L ratio of 19%, while the condo market continues to favour sellers, though at a rapidly-ebbing S-L ratio of 25% in July.

The early returns for August are following a similar pattern to July: that is, slower sales activity and marginally declining supply. And with the trajectory of macroeconomic conditions—the labour market, inflation, and interest rates, specifically—remaining unchanged for the time being, we expect these latest trends to continue into at least early September.

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.