If it seems like we’ve been highlighting muted MLS sales counts throughout the Vancouver Region for a few months now, well, it’s because we have. The economic dynamics governing our market conditions in the second half of 2022 remain present to this day: persistently high inflation and rising interest rates continue to sideline demand while our robust labour market has served to keep supply in check. As a result, market activity was relatively stagnant in October, setting up our market for a slowdown like we haven’t seen in a decade.

The typical pattern of change in MLS sales counts in the Vancouver Region between September and October is one of increase. Indeed, total sales were 9% higher last month than in the previous—aligning perfectly with the bump in sales we normally see at this time of year. However, the actual number of sales we saw in October fell far short of the norm: the 2,778 transactions were 36% below the past 10-year October average and 48% below those of October 2021. Furthermore, the overall regional MLS sales count failed to surpass the 3,000-mark for the fourth consecutive month—something that hasn’t happened since early 2019. 

Based on the early returns for November, we’re on pace to finish well below 3,000 sales again this month, with a similar outcome likely in December, too. Notably, then, if our market does, in fact, fail to deliver 3,000 sales in either of the final two months of 2022, we will begin 2023 having registered six consecutive months of sub-3,000 sales, the most protracted period of slow sales in a decade (our market failed to reach 3,000-sales mark over a seven-month period at the end of 2012 and into early 2013).

Given the four months—and counting—of suppressed sales counts, one might expect that inventory would be on the rise and that market conditions would favour buyers. In such a case, one would be wrong: once again, in October, total listings were restrained, as they actually fell to 14,661. This may be 36% higher than the record-low October inventory of 2021, but it remains 18% below the long-run average for the month. This lack of supply in the face of almost-absent demand has yielded relatively balanced conditions in the market, with the overall months-of-inventory ratio declining to 5.3 in October (less than five months is considered a sellers’ market; 5-8 months a balanced market; and 8+ months a buyers’ market).

Having noted that November’s MLS sales activity has been sluggish to start the month, combined with what we know to be a slowdown of buying and selling in the winter and what will be another Bank of Canada interest rate increase on December 7th, we feel certain that our current market dynamics will prevail into early 2023, at the very least.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.