Guest post by James Wong – Team3000 Realty
Sharp Drop in Housing Sales in June, 2012
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties dropped to 2,362 in June, a 27.6 per cent decline compared to the 3,262 sales in June 2011 and a 17.2 per cent decline compared to the 2,853 sales in May 2012.
June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484.
“Overall real estate conditions have trended in favour of buyers, with a large supply of homes in the market”. View the full June housing report here.
At 18,493, the total number of residential property listings on the MLS® increased 22 per cent from this time last year and increased 3.7 per cent compared to May 2012. There were many homes expiring unsold or taken off the market by home sellers.
The sales-to-active-listings ratio at 13 per cent signalled a large over-hang of homes for sale, and fewer buyers in the market. many home buyers are staying on the sideline, watching how the market is going to pay out.
Home prices for now are showing signs of softening with relatively small decline in values. There is a small number of home sellers adjusting their selling prices in line with the market. But, will a large supply of homes and fewer sales the past 12 months, a quicker cascading price decline can be expected in 6 to12 months. If the real estate market is entering a down cycle, the deflation in home prices can be expected to take many years to play out. View homes for sale in Vancouver, Richmond and Burnaby.
The chart above showing a mirror image of the run up in home prices could point to what to expect should this be the down cycle for the Greater Vancouver real estate market.
Where are the buying opportunities?
The current market is more challenging for home buyers as “timing” is a big question. In a market when home sales are down drastically, what follows are withdrawal of potential buyers from the market. Most of these home buyers may prefer to wait for the market to show signs of more buying activities. Understanding the real estate cycle is important as getting into the market too early can pose a problem to the home buyers.
In a down market, increase sales may not mean the real estate market stabilizing. It may be just a pause before further decline in home prices takes place. Should you be thinking of buying or selling, you should consult with an experienced local real estate agent in your area. Learn more about the current real estate market in your area before deciding if it is the right time for you to buy or sell. For more info about the Vancouver, Burnaby and Richmond market, kindly contact James Wong at 604-721-4817 for a chat.