Blog › September 2016

Uptown Vancouver Blog

End of Summer Update

Sky is not falling We hope the Summer treated you well and produced great memories for you and your loved ones!  Now that the Fall is in sight, we settle into our normal routines, kids are back in school, and hockey is just around the corner.

This year has brought us a crazy market to say the least and, to top it off, the B.C. government threw us a curve ball with the newly implemented 15% foreign buyer tax.  The repercussions are yet to be determined but one thing is for sure, it gave the market an excuse to slow down from a pace that we all know was unsustainable.  As a result, sales numbers have dropped significantly and the media jumped all over it with headlines like “Is the Metro Vancouver real estate market in free fall?", "Canada's housing market nears extreme bubble”, "Fear and loathing in the Vancouver property market".  It's enough to leave the impression that property values in Vancouver's sky-high real estate market could be collapsing.

Indeed, if we dig into the latest stats released by the Real Estate Board of Vancouver, the average price of a home in the region has actually fallen — drastically.  The average price of a single-family detached home topping out at $1.8 million earlier this year, and then dropping sharply to $1.47 million last month.  That's a loss of $330,000 on the average home but not so fast.  The truth is, unless you're dealing in the upper end of Vancouver's luxury market, the average price shouldn't mean squat to you.  Why?  Average prices are exactly that.  They take all the homes being sold, including those worth $5 to $25+ million, and put them in the same box as the typical single-family residence.  It takes just a few of those stratospheric deals to significantly skew the average value for the whole market  Therefore, when the flurry of activity at the luxury end of the market dropped off this Summer with the reported prices of some homes dropping by millions, it is not surprising to see average prices dropping dramatically too.

But that's not what the numbers say is happening across the rest of the market.  Typical homeowners should not be looking at the average price and concluding that the value of their real estate is suddenly in free fall.  A more accurate gauge of value is calculated by the industry based on what they call the benchmark.  A benchmark home is much more like the one most of us live in.  The number of bedrooms and bathrooms are measured in single digits. The square footage is not in the 4,000+ range and the views include neighbours' backyards or other buildings, not panoramic vistas.  So when you look at the benchmark prices for Metro Vancouver homes, they have not walked off a cliff plunging into free fall, they are in fact still climbing, albeit just barely.

Words like peaked, flattened, stalled apply for now but there’s also a chance that this is just a hiccup in a market that continues to be undersupplied.  Inventory is still low compared to historical averages and interest rates aren’t going up anytime soon.  The big question is demand.  How many buyers are still out there?  Well, the figures show the number of buyers in the market is still out pacing sellers, and so far there are no signs of panic selling, boarded up homes, and speculators defaulting on multiple underwater mortgages.

On top of that, there is ample evidence that those wealthy foreigner buyers never left B.C. Many just have flocked to Victoria, where the tax does not apply, luxury homes are a relative bargain and sales climbed 19 per cent in August.

There is no doubt Vancouver has supercharged real estate values, as prices have outstripped wages for years, and griping about real estate is more popular than the weather. But, unless there is a mass exodus from this city, that's all unlikely to change.

So when the next headline makes you wonder if the bottom has fallen out of the market, and home values are in free fall, take a deep breath and remember: the typical homeowner has a lot less to fear than the average.

 


New Listing 111 - 750 E 7th Avenue, Vancouver, BC

R2110812 - 111 - 750 E 7th Avenue, Vancouver, BC, CANADAView my new listing for sale at 111 - 750 E 7th Avenue, Vancouver and currently listed at $339,000.

Live in the heart of Mount Pleasant for a great price! This 1 bedroom, 626 square feet ground floor unit has a great, efficient layout with lots of space and nice outdoor area. Upgrades include new laminate flooring, paint, kitchen countertops & backsplash, and new appliances. Well run building with proactive strata and over $168K in contingency. Hot water heat included in maintenance fees. Enjoy the quiet street, Sahalli Park right next door, shopping & transit just 2 blocks away, and a thriving community in the center of the city. Best value on the market!

New Listing 507 - 1775 Quebec Street, Vancouver, BC

R2109908 - 507 - 1775 Quebec Street, Vancouver, BC, CANADAView my new listing for sale at 507 - 1775 Quebec Street, Vancouver and currently listed at $550,000.

AMAZING LAYOUT: 1 + den on the South/West exposure at Opsal, the tallest tower in SE False Creek. Built in 2014 by Bastion Development. Features include: Environmentally green design, gas hookup on balcony, Gym/Spa, over height ceilings, Extra large parking stall, Huge Storage Locker, gourmet kitchen including: FULL SIZE S/S Bosch range, Fisher Paykel refrigerator, upgraded storage in den & caesarstone counter tops. Opsal sits in the vibrant growing SE False Creek neighbourhood, a short walk to the water, amazing restaurants & shopping at your doorstep. Minutes from downtown and conveniently located by transit. Come be a part of this new thriving community. Sneak Peek Thurs Sept 22nd 6-7pm, Open House September Sat/Sun 24th/25th 2-4pm.