Slow deterioration would be my description of the present Vancouver real estate market. Vancouver West's September listing volumes rose and sales volumes for both dropped yet again, edging the Apartments and Attached homes Months of Inventory metric closer to 7 months. The anomaly has been the Detached market where September became the second month running where active listings declined and sales volumes increased. The trend is still clear: the over all year to date months of inventory has more than doubled for the Vancouver West residential market and is likely to continue.
For sellers, the good news is that although the market is in decline, it is doing so very slowly. Unlike the 2008 credit liquidity crises (started by sub-prime mortgage backed collateralized debt obligations), there has been no specific event to create a sudden plunge. In addition, there has been no significant fear of rock bottom fixed term mortgage rates going up. This means that there is still an opportunity to get out before pricing gets worse. For buyers who have been waiting, there continues to be a wide and increasing choice of listings waiting to choose from and the lure of falling prices. It appears that in boom markets, fear of loss has driven buyers to bid up the market very quickly and in this down market perhapes this same fear of loss has made sellers reluctant to part with property at lower prices; the result being a slower (but steady) deterioration of the market.
Remember that: “Months of Inventory” is a measure derived from the number of active listings during a given month divided by the number of sales that month. It indicates the theoretical length of time it would take to sell all of the properties on the market if nothing changed. Historically, 0-5 months of inventory has generally implied upward price pressure for the ensuing six months, 5-8 months of inventory meant a flat market with respect to pricing and over 8 months of inventory has, for the most part, precipitated downward price pressure.
Do not hesitate to call me if you have any questions and please pass this and my contact information along to any friends or family that may benifit from my services.
By Sam Wyatt - Vancouver Realtor
CLICK TO VIEW: Vancouver West Months of Inventory Sept 2010 Create Blog
Mobile: 604-722-3734
sam@samwyatt.com
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36 East 5th Avenue
Vancouver, BC, V5T 1G8
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