Next Home: Local Market Soars with Local Buyers
Home sales continue at an unscrupulous rate in Metro Vancouver and beyond in British Columbia despite of, and perhaps due to, the Covid-19 pandemic. With the borders closed in addition to taxes brought in to fend of the “foreign buyer” this begs the question how much foreign buying was even or if it ever was a significant factor prior to the pandemic as home prices soar higher than ever seen in our province before.
Like anything homes are a product that are produced and sell at a market price based on supply and demand. The industries involved include everything from architectural, engineering, landscaping, interior design, trades and more that enable employment for the majority of our population in British Columbia. The pandemic has shown how undersupplied our home market is, especially in metropolitan and suburban areas. Buyers in this real estate ‘wave’ are also local buyers pushing the market up due to the rules of the pandemic itself and clearly not a foreign buyer issue as politicians have tried to have us all believe prior to the pandemic. If this was the case the market would and could not be rising as it is today.
As more and more industries realize that productivity has increased despite and perhaps because of the new “work from home” mandates for many companies. People are realizing the daily commute is no longer needed and can look for more space to enable working from home, farther from their place of work to allow more affordable prices within their budget is now possible. Many companies are supporting this as they can have less overhead with employees working from home and not requiring space in the office for all staff any longer. In addition to the higher productivity rates of those now working from home. This is the bright side the pandemic has opened for many British Columbians. Those living at home want their own space, even if a simple condo for added privacy. Those with families are looking for townhomes and single-family homes instead of condos. Each person’s needs are different but what they all have in common is looking for real estate they can call their home and live more comfortably and safely during this unprecedented time.
The effects are seen in multiple offers in re-sale homes, especially single-family homes across Metro Vancouver and the Fraser Valley alike, and even the Okanagan. This pattern has also emerged in townhomes and multifamily homes including new homes due to the low supply available in almost every area. Multiple offers on new homes were rarely seen until this past year. Much of the supply issue is due to slower approval processes at the city and municipal level across the province. This is one of the many down sides of the pandemic as city staff and councils do their best with online meetings.
Will this continue to be the case once vaccines are fully rolled out to the general population? When will the end to rapid price increases and multiple offers end for British Columbians? While no one really knows, the “work from home” era is only just beginning. Even when the economy is opened again most companies profiting from this angle may implement it as the new standard. Local governments will need to ramp up approval processes to allow more homes to be built at a faster rate to increase supply at all levels. This would help the market slow down with supply able to meet the current demand for each city and municipality. On top of this building costs are on the rise. The price of lumber has recently tripled as one example. Whether prices fluctuate farther up or level off will remain to be seen. If one qualifies to get into the market they should as even if the market slows everyone needs a place to live and call home and unless you need to sell the historical pattern shows long term values go up, so owning a home for yourself is an investment in yourself.