Metro Vancouver Real Estate Market Continues to Struggle with Inventory Shortages
The Real Estate Board of Greater Vancouver (REBGV) has recently released data showing that the Metro Vancouver housing market is experiencing sluggish sales activity due to a shortage of inventory. In February 2023, residential home sales amounted to 1,808, marking a decrease of 47.2% compared to the same period last year. Sales were also 33% below the 10-year February sales average.
Despite the low sales activity, inventory levels in the region have gradually increased. As of February 2023, there are currently 7,868 homes listed for sale on MLS, representing a 16.7% increase compared to the same period in 2022 and a 5.2% increase compared to January 2023. However, the number of homes newly listed for sale in February 2023 was 3,467, marking a 36.6% decrease year-over-year.
Andrew Lis, REBGV's Director of Economics and Data Analytics, explained, "It's hard to sell what you don't have, and with new listing activity remaining among the lowest in recent history, sales are struggling to hit typical levels for this point in the year."
Despite the slow sales activity, the lower number of sales is enabling inventory to accumulate, which is preventing market conditions from straying too deeply into sellers' market territory, particularly in the more affordable segments. Additionally, while current data and market activity suggest that home price trends will show year-over-year declines for a few more months, pricing is beginning to firm up. Some leading indicators suggest that we may see modest price increases this spring, particularly if sales activity increases and mortgage rates hold steady.
The sales-to-active listings ratio for all property types in February 2023 is 23%. By property type, the ratio is 16.8% for detached homes, 30.1% for townhomes, and 25.8% for apartments. Analysts generally say that downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,123,400, representing a 9.3% decrease year-over-year and a 1.1% increase month-over-month. The benchmark price for detached properties is $1,813,100, representing a 12% decrease from February 2022 and a 0.7% increase compared to January 2023. The benchmark price of an apartment is $732,200, representing a 3% decrease from February 2022 and a 1.6% increase compared to January 2023. Lastly, the benchmark price of an attached unit is $1,038,500, representing a 6.3% decrease from February 2022 and a 1.8% increase compared to January 2023.