Vancouver Real Estate Market Booms Fueled by First-Time Buyers

October 2009 ended up being another stellar month in Vancouver real estate. We've been spoiled this year and grown accustomed to seeing strong results month after month. October 2009 was a month of steady demand and shrinking supply which resulted upward pressure on prices.

So far, there are no signs of the Vancouver real estate market slowing down. If anything, October looked better in many ways than September. History tells us that we should expect this to change as the holiday season is approaching and this is typically a slower period. I expect that we will see a seasonal pullback in sales beginning this month and leading us into December.

Our market continues to be driven by first-time buyers, pent-up demand and low interest rates. The majority of first-time buyers that held off their purchase through the downturn, have bought. The same is true withother categories of buyers that constituted the pent-up demand. As the economy improves and signs of strength return to the economy, we should also begin to see upward pressure on interest rates.

For these reasons I think that we will not see real estate values in Vancouver continue to skyrocket. During the middle of 2009 there was significant and rapid price appreciation in Vancouver. Prices will still increase, but I think that  they will do so at a more modest pace heading into 2010.

The official line

“While home prices have been rising in 2009, they have not eclipsed the peaks reached in early 2008,” Scott Russell, Real Estate Board of Greater Vancouver (REBGV) president said. “We’re coming off several months of unseasonably high sales levels, which has allowed for a gradual increase in home values this year,”

“High confidence and low mortgage rates are continuing to drive the activity we’re seeing in the housing market today,” Russell said.

The numbers

For the fourth time in the last seven months we had an increase in Sales (+6.09%) from 1166 to 1237. Unsurprisingly, this was a huge 205% increase over the 405 Sales in October 2008. The majority of the strength in Sales came on the Westside where they increase 10% month over month versus a slight decline of <1% on the Eastside.

New Listings fell (-10.05%) to 1709 from 1900 (month to month). This was the third time in the last four months that they fell. Year over year, there was an increase (+6.75%) to 1709 from 1601. The decline in New Listings was strongest on the Eastside (-17.07%) vs the Westside (-6.35%).

After seeing recent rises in both the Months of Supply and Active Listings numbers, October saw both of these fall. Active Listings fell very slightly (-0.72%) to 3331 from 3355. Meanwhile the Months of Supply dropped (-5.88%) to 2.67 from 2.84.



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