Real (Estate) Talk with Ryan Berlin - January 2023

In the past two editions of the rennie review (here and here), we noted that the Vancouver Region was on pace for 6 consecutive months with less than 3,000 MLS sales. And with the final December numbers tallied, not only is that what transpired, but December actually recorded fewer than 2,000 transactions. Last month’s 1,963 sales in the region were 55% less than December 2021’s pandemic-bloated tally, 39% less than the past-10-year average, and were the lowest of any December since 2018. This marks the first time in a decade that the region has recorded 6 straight months (and possibly counting) without hitting the 3,000 threshold. And with December now in the books, we can observe how the once-in-a-decade slowdown of the past half-year fits within the broader context of 2022. 

Last year’s total MLS sales finished at 43,624, which is 38% less than the record-setting total from 2021 and 14% less than the past-10-year average. That total sales were only 14% less than a typical year speaks to the divergent experience of 2022’s first and second halves: almost two-thirds of all sales last year (28,253) occurred between January and June, while the remaining one-third (15,371 sales) occurred between July and December. This 65%-35% split in sales counts between the first and second halves of 2022 compares to a more typical split of 52%-48%, and was the most skewed sales distribution since 1982.

Interestingly, if the pace of sales in the first half of the year continued through the balance of 2022, the Vancouver Region would have tallied more than 54,000 sales, which would have represented the second-highest annual total since 2017. Conversely, if the pace of transactions in the second half of the year had prevailed for the entire 12 months of 2022, it would have yielded just over 32,000 sales, for what would have been the lowest annual total since 2000.

Despite the prolonged slowdown in sales that characterized the second half of 2022, there were only 10,876 homes available for purchase across the Vancouver Region by the end of December. Sure, this was 61% higher than the record-low inventory of one year ago, but more tellingly it was 10% below the long-run average. Furthermore, the region’s total listing count slipped below the 10,000-mark on January 1st after end-of-year expiries and cancellations took effect. As of writing this report a week into January, total listings remain below 10,000.

With another potential interest rate increase from the Bank of Canada looming on January 25th, it’s unlikely that housing market activity will evolve away from its recent (and current) trajectory in the near-term. Having said that, our view is that meaningful changes in our market dynamics may reveal themselves as early as Q2, and for details pertaining to our market outlook, we encourage you to read the 2023 edition of the rennie outlook, which we’ll publish at the end of January.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.