Metro Vancouver’s hot real estate market starting to level off

There are signs Metro Vancouver’s red hot housing market is starting to cool off, with a record-breaking number of properties up for sale in the month of February.

According to the Fraser Valley Housing Market stats, buyers had significantly more inventory to choose from last month compared to the months before. In fact, there was a 75.3 per cent increase in new listings in February compared to January.

Jamie Squires with Fifth Avenue Real Estate says this is a sign the market is beginning to level off.

“It’s not balanced yet; there’s still more demand than supply, but it’s getting better. And we actually saw the first decrease in townhome sales in February as well,” she told CityNews.
“So we see that kind of the trickle down effect, we see it in a rising market, as well as a balancing market.”

Squires says this is good news for first-time home buyers.

“[First time home buyers] have a much better chance than they did … the last two years prior to the last two months. Instead of in resale, you were seeing homes, townhomes, even condos go into what we call multiple offer situations. And it wasn’t like you were competing against one or two other people, you’d be competing against 5 to 20 other people. Which is why you would see the escalating prices, things going over ask — because people just wanted to get in,” she explained.

Now, she says they’re seeing about two to five offers on properties.

“So your chances are getting better. And as supply hopefully starts to increase, that can get better for everybody locally.

Typically, Squires says the prices for the single-family sector are the first to rise, but the first to balance or go down. She goes on to explain the same later happens to the townhome sector, and eventually the condo sector.

“And the reason the condo sector is last, is because it’s actually the most affordable product type on the market. It’s the one that majority of people can afford.”

However, she says as the market cools down, interest rates are expected to go up. Adding the already high-stress test could also be rising soon.

“Interest rate increases were announced earlier this year– with the first one actually taking effect March 2, which raised prime by 0.5%. So prime is now at 2.7%,” she said. “Luckily, the government has not come in and increased the stress test yet, which is what affects first-time homebuyers the most. So right now you find 2.7% depending on your bank, your lender, your credit rating, you’re going to get prime plus or minus some amount.”

Squires’ advice, since the region is “landlocked … [and] people want to be here … the best time to get in as soon as you can and leverage that.”

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