Vancouver real estate market crash? Not so much...
For quite some time, many in the media have been predicting doom and gloom for Vancouver’s real estate market. The predictions are for a flood of new listings and falling demand; the reality, though, is it’s just not that bad.
The November 2012 REBGV statistics confirm that supply is contracting and Sellers are actually pulling out of the market, as illustrated by the large drop in the amount of properties listed for sale across the region.
A common assumption among more alarmist and less informed commentators is that recent softness in the Vancouver market is the beginning of a huge drop in prices. They contend that deeply indebted sellers will be forced to sell and buyers will not be able to buy. Many predict or allude to Canada experiencing a housing crash, not unlike what happened in the United States.
Thankfully the data is proving these theories wrong. Sellers in Vancouver are sitting on a significant amount of equity (value in the home after subtracting the mortgage balance). Many property owners who have been trying to sell have decided to take their properties off the market to wait for better market conditions. They are doing this because they can. This suggests we are not seeing panic in our current market.
Unemployment remains relatively low in Vancouver, interest rates are at all time lows, mortgages are easy to get, and the economy in BC is performing quite well.
This all means that buyers can and are able to buy property. Many are waiting to buy, but Vancouver is not in a situation where buyers cannot buy.
What all this means for buyers and sellers is that the Vancouver real estate market is softening gradually. Buyers are able to negotiate a far better deal than they could have 6-18 months ago. Sellers are able to get their property sold, though it may take longer and they may have to concede a bit more in negotiations than in previous markets.
Sorry doom and gloomers, the market is just not crashing.
Mike Stewart is a Vancouver realtor