New reality for home buyers in BC shapes real estate market this summer
Has the real estate market on the Sunshine Coast fallen off a cliff?! Is the end nigh?!! I certainly don’t think so.
I believe we are seeing buyers and sellers adjusting to some new realities “out there”. Usually change is accompanied by confusion or, at least, a wait and see attitude by those active in the market. We see this on the buyer’s side, clearly, by the lack of completed deals. When we add the time of year to the mix, and the fact that many are simply opting for the beach and vacation mode over house hunting and selling, then we see the slow down as being even more pronounced. I believe we’ll see a big jump in activity over the month of August and into September as many folks who are deferring their purchase today will only wait “so long”.
Let’s see how July 2022 real estate stats break out:
Fully Detached home sales
Fully Detached home sales – were down by 87% in dollar volume to $10,050,000 and down 88% in unit sales to 9 units sold in July. Our inventory climbed 41%, compared to the same time last year, giving us 261 available homes on market. This means our sales success ratio (the amount of sales versus the available inventory) was 3.5%…this is deep into buyers’ market territory if we extrapolate this continuing.
Year to date is a bit more rosy with only a 23% reduction in dollar volume to $406,400,000 and a 34% reduction in unit sales to 342 homes sold.
The average price for a detached home so far in 2022 has risen 16% to $1,188,000.
Condo and Townhome sales
Condo and Townhome sales – were down 94% to $480,000 in dollar volume and down 94% in unit sales to 1 unit sold in July. Our inventory fell 23% to 50 available attached homes on market. This means our sales success ratio is 2%.
Year to date we see dollar volume is down by 31% to $60,800,000 and unit sales are down by 34% to 113.
The average price for a condo or town home is up 14% to $640,000.
Land only sales
Land only sales – were down 91% in dollar volume to $700,000 and down 85% in unit sales to 2 lots sold in July. Our inventory decreased by 37% to 76 available units resulting in a sales success ratio of 2.5%.
Year to date we have seen a decrease in dollar volume by 25% to $61,500,000 and unit sales by 39% to 100 lots sold so far in 2022.
The average price for a piece of bareland has risen by 22% to $615,000.
Home Sellers
Home Sellers – Competitive pricing is more important than ever. To get a sale done in 2022 may require a deeper cut to your asking price than you first imagined. If you have bought recently this can have a concerning, negative impact. However, if you bought prior to 2020 then you are likely still in a very good position when it comes to equity. My thoughts are that you deal with any deferred maintenance on your home and sharpen your pencil with regard to your bottom line and “what you need” to move forward.
Home Buyers
Home Buyers – This is a great market for you to achieve the kind of deal you want! Within reason one can create favourable terms through an offer on the “right one”. On that note, don’t let the lack of action frighten you. If you find “the perfect place” (and they are out there), don’t flounder around with indecision. You know what you want so if you find it, buy it. Just do it on your terms. If you are looking but also “waiting and seeing” you will likely miss out and regret the indecision/fear.
External Factors Pressurize Home Buying
With regard to external factors we see the Bank of Canada raise interest rates again when they meet again September 7th. Presently prime sits at 2.5% (with consumer prime around 4.7%). We will also see the BC Government introduce the buyer cooling off period as law moving forward on January 1, 2023. Rather late and certainly inane tinkering with BC citizens’s ability to transact with one another….The cooling off period will amount to 3 business days and, if a buyer backs out of a deal during that time, they will be on the hook for a 2.5% penalty (think $2,500 on a million dollar home).
There are many other factors at play and this legislation raises questions around the process of buying and selling. I will have answers as our industry is informed by government….
For market stats call your realtor. For market intelligence call Russ Qureshi at ReMax City Realty 604-741-7119 or russ@coastlifestyles.ca
