Real (Estate) Talk with Ryan Berlin - March 2023

I’m sure, you’ve heard it all before, but the early part of the year is typically characterized by growth in the number of new listings that come to market. In turn, this typically brings an expansion of overall housing inventory, even as sales counts also typically grow over the same period. And while inventory did expand in the Vancouver Region in February, the growth was far from typical for the month and, in turn, continued to impact the overall market dynamic.

There were 11,362 listings in this region in February—the most since last November, a 6% increase from January, and 16% more than at this time last year; having said that, inventory remains 22% below the past-decade February average. New listings, meanwhile, apparently need a little time to wake up, as February’s total of 5,254 was 42% less than that of February 2022, 27% less than the past 10-year average for the month, and represented the fewest new listings in any February since 1986. Against the backdrop of sales activity, these supply-side features have helped to yield conditions favouring sellers, with there being 4.2 months-of-inventory (MOI) in February.

Notably, 58% of all homes available for sale last month were listed at prices below $1.5 million (including 24% below $750,000), compared to 79% of homes having sold below $1.5 million (including 39% below $750,000). Indeed, conditions in this price segment of the market—where the average buyer and seller participates—are tilted even further in favour of sellers, with only 3.1 MOI. 

Interestingly, while the age of homes available for sale hasn’t changed much over the past year, the share of those that has been listed for at least 60 days—in other words, those that were listed sometime in 2022—reached 36% by the end of February, up substantially from last February’s 22% of all listings that were at least 60 days old. Ultimately, the reality of the supply side of the housing market here in the Vancouver Region is that more affordable and more desirable homes are in much greater relative demand today than are their counterparts, which has the effect of rendering existing inventory even more constrained than it appears at first blush.

Tight housing supply has meant that even though sales counts failed to reach the 3,000-mark for the 8th consecutive month in February, and high interest rates continue to put pressure on affordability, benchmark prices actually increased in February—in fact, they increased for every home type, including a second consecutive month of increases for condos.

With the Bank of Canada hitting the brakes on interest rate hikes, some might say, we’ll find a bright day sooner than later. Indeed, this may be the case—though it will be some time yet before we see a return to historically-typical levels of inventory and sales that define a stable and well-functioning housing market in this region.