There's no doubt that Covid-19 has altered the Greater Vancouver real estate market and also the way business is conducted. Many professional REALTORS® have altered the way they're conducting business in order to keep the public, their clients and all those involved in the real estate transaction safe.
So, How Are We Conducting Our Business to Keep Everyone Safe?
As real estate is deemed an essential service by the government, we're able to continue to help clients buy and sell real estate during Covid-19.
As always, the safety of our clients, community and all those involved, is our top priority.
Therefore, we’ve implemented safety precautions, viewing guidelines and are working virtually and electronically as much as possible. Masks and social distancing are the new norms.
For sellers, we continue to create floor plans, videos, 3D virtual tours and high-end marketing for our listings. This is extremely important to buyers and sellers in these times. It allows buyers to preview the property from the safety of their home and determine if a private showing is warranted. Therefore, sellers will have less people viewing their home in person, but the ones who do, are more serious about their home.
Is this Recession Like Previous Ones in BC?
Here is a great article by BCREA and a summary of their findings:
- The recession will be deep but may be shorter than others in BC.
- Home sales will report an initial decline as the public adheres to social distancing.
- Once the measures put in place to mitigate the spread of Covid-19 begin to slowly lift, the public will begin to re-engage in real estate.
Canadian Job Losses by Earnings
According to economist Brendon Bernard at Indeed Canada, the number of employees in lower-paying occupations was down 30% year over year in April, while mid-wage was down 20%, and employees in high-wage occupations are only down 1.3%. That's quite a disparity!
Greater Vancouver Real Estate Market Summary
In March 2020, when the Covid-19 restrictions were implemented by the government and deaths were rising, as expected, many buyers and sellers put their real estate plans on hold unless they needed to buy and/or sell. For example, some people had already sold and still needed to purchase a home, or vice versa. While others, were in the middle of relocating or had pressing personal reasons.
Initially, we saw a fairly proportionate number of listings come off the market, related to the number of sales being transacted. Therefore, the market did not crash and is not expected to crash (in our opinion).
In April, sales and listings are obviously down from the same month last year, but prices still remain stable. During the past week, we've seen an increase in the number of listings and the number of buyers re-engaging their search. So, those are positive signs.
In March, April and May 2020, there are still many neighbourhoods and products which are under inventoried, desired and in high demand. This has led to some homes continuing to sell in multiple offer situations, with buyers competing to acquire the home, and homes selling over asking price. However, in general, it is a balanced market overall (and a buyer's market in some areas), so there are still opportunities for buyers.
Weekly Sales Numbers Increasing - It's Getting Busy!
Weekly Greater Vancouver average daily homes sales and new listings.
- Week 1 of May: 58 Sales & 168 New Listings
- Week 2 of May: 69 Sales & 169 New Listings
- Week 3 of May: 93 Sales & 243 New Listings
Three straight weeks of significant improvement. Plus many of those sales were involved in multiple offer situations. Signs that the market is getting busy and buyers and sellers are re-engaging.
Canadian Mortgage Rates have Fallen
Another factor influencing the market are the lower mortgage rates. On May 12, 2020, ThinkMortgages.com provided the following update:
High Ratio Mortgage (mortgages with less than 20% downpayment):
- 5 year fixed term, 25 year amortization is 2.49%. Which translates into $448 / month for every $100K borrowed
- 5 year closed variable rate, 25 year amortization, is prime -0.25 or 2.20%. Which translates into $434 / month for every $100K borrowed
Conventional Mortgage (mortgages with at least 20% downpayment):
- 5 year fixed term, 30 year amortization is 2.79%. Which translates into $410 / month for every $100K borrowed
- 5 year closed variable rate, 30 year amortization is prime -0.20 or 2.25%. Which translates into $382 / month for every $100K borrowed
Greater Vancouver Real Estate Market Forecast for 2020
Baring any Covid-19 and economic setbacks, we expect the market to slowly heat up for the more desirable homes and price points as we move through the year. Some of the drivers are enormous pent up demand, low supply, low interest rates, and all of the wonderful things Vancouver has to offer.
We've also noticed an increase in the number of U.S. citizens reaching out to us and inquiring about Greater Vancouver real estate.
With buyers spending so much time at home over the past couple of months, we're noticing that some have re-evaluated what's important to them. Some are now looking for more space, less congestion, homes without elevators, and therefore, we may see more demand for townhouses, half duplexes and houses. Currently some markets have a shortage of good entry level detached houses, so there may be some price increases if demand increases and supply remains low.
But every neighbourhood and home is unique. So, as your real estate professionals, we're always here to help. We can fill you in on what’s happening in the local market, help you determine what kind of new home you are qualified to purchase, provide the current value of your home and provide a clear idea of the properties currently available.
You don’t have to try to figure things out on your own! We're here to help.
Even if you’re just at the “thinking about it” stage, we recommend getting the information you need now. That way, you’ll be prepared to make the best decision when you’re ready.
Detailed Statistics by Area
As always, Contact Us if you have any questions or would like some help.