Vancouver’s Inventory Turtles

Loser – Winner

Total Active Listings haven’t been this low at this time of year in eight years. If you are Selling a home consider yourself a winner of sorts as prices continue to increase. But you could be a loser if you sold and are now trying buy a home in Vancouver. Caution says secure that purchase in advance of your sale.

BCREA

B.C. Residential Sales

The British Columbian Real Estate Association confirms that lower inventory is not an isolated Vancouver phenomena.

“Strong consumer demand has drawn down the inventory of homes for sale to their lowest level in nearly eight years. As a result, sellers’ market conditions are prevailing in many communities and causing home prices to be pushed higher. The average MLS® residential sales price in the province is forecast to climb 10 per cent to $626,000 this year.”

Maybe or Maybe Not

What’s the cause of this low inventory – few know.

Low inventory could be a result of offshore suitcases loaded with cash ready to buying anything in sight. More likely it might be locals taking advantage of low interest rates. Unfortunately, no reliable statistics exist to validate either. The only thing we really know is that the inventory bucket is running on empty.

A side bar to the why question may lie in cheesy psychology that asks how come so few are choosing to sell their homes at this time?

At first glance it seems logical that in this fast market with accompanying high prices it may really be the best time to sell. But what if is not?

Inventory Turtles

painted turtles on log

Is it best to be a hare or a turtle?

Two thoughts.

One is that the lack of inventory might suggest that many home owners are content living in their shell. Paper profit means little and there is no pressing need to sell their home in favor of another. After all, along with their friends they are comfortable and warm in their shells on their neighbourhood log.

The second is more sinister?

Whether the choice to sell is a matter of desire or less favorably, a result of deteriorating health or financial problems may force a sale. For either there is an alarming aspect for sellers thinking of trading shells. It is the real danger that a fast market presents.

With a market out of control timing and speed become critical. Getting from one log to another to another can be dangerous. It can be a simple matter or a slip misstep – a hesitation.

Hesitation at the outset can be unforgiving and delay in securing a new home can result in great exposure to financial hardship. When it is time to hop on a new log the inherent characteristics of a Hare has advantages.

It may seem ludicrous but in this market of multiple offers and fast sales it can be only a matter of a few days between success and catastrophe and those who choose or are forced to sell could quickly find themselves priced out of the market.

Retirement, good health, and being mortgage free are all good reasons not to leave the comfort of your shell and familiarity of your neighborhood log. If selling is not a forced requirement, I suspect many potential sellers have become inventory turtles, sunning on their log safe in their shell.

How Bad Is It?

Vancouver housing inventory

It’s only August and the level of inventory currently sits at 17,975 – a number usually seen in the chilly wet days of a traditional December market.

It’s a little over four months before we reach that time of year. I expect that this market will continue to starve for inventory and see new low levels below the 13,000 mark in late December early January. Add to this the following early spring market rush of late January, February early March when the traditional Chinese holidays occur. We may see average prices once again reach prices that many Vancouverites consider extreme.

About Affordability?

I would love to tell you that our Municipal Government is winning the battle however, under the assumption that this trend continues to next year and beyond the word affordability when applied to Vancouver may be struck from our urban lexicon.

Tired of Being a Turtle?

Let me help you get out of your shell. Call me. My number is in the upper right hand corner.

About Larry Yatkowsky

Larry is a recognized real estate expert. A veteran professional, his experienced counsel leads Vancouverites in his west side community to place their trust in a man passionate about his work. Uncompromising ethics bring a balanced approach to realizing your real estate dreams.

When Life Moves You - contact Larry:

*Disclaimer: Statistics Courtesy REBGV. While believed to be accurate they are not guaranteed.
**Numbers provided may vary as they are dynamically posted by the REBGV.

Reader Comments:

would-be buyer Says:
August 21st, 2015 at 11:56 pm

It will be interesting to see what happens once Yellen starts to raise rates south of the border. Will there be a rush to the exits as interest rates finally start to rise? I assume currently most sellers are either 1) unable to sell because they can’t afford (low VA incomes) to climb the property ladder or are unwilling to move further out of VA to reap the rewards of selling their SFH (again, due to low wages) or 2) waiting to sell because of perceived notions of leaving money on the table if they sell too soon (greedy bubble mentality).

2016 will be interesting.

August 22nd, 2015 at 7:32 am

@would-be
Your reasoning is I think, only a part of a greater picture. There are I believe more subtle underpinnings. Consider googling the
stress of moving for alternate thoughts.

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