High sales, lower listings set stage for hot Metro Vancouver housing market

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      Kevin Skipworth doesn’t think there’s anything traditional about Vancouver’s real-estate market.

      That said, Skipworth, a partner and managing broker at Dexter Realty, recognizes that both home selling and buying generally follow a seasonal pattern.

      To illustrate, most sales and listings happen during the spring market, which typically starts around February and March. Activity slows down in the summer, when many people are on vacation. The market picks up again in the fall, then quiets down in the winter.

      “January is typically a slow month,” Skipworth noted in a phone interview with the Straight.

      In prepandemic times, Skipworth recalled, many people were away during the Christmas season. Or, if they were at home, they didn’t do much in the early weeks of the new year that followed, which is still winter.

      However, going by the numbers for January 2021, the spring market looks to have gotten off to an early start.

      In his additional role as Dexter Realty’s chief economist, Skipworth prepares semimonthly market reports for the company. This is why he is very much on top of what is happening.

      “We don’t usually see that amount of activity in the beginning of January,” Skipworth said.

      On February 3, Skipworth released his January 2021 report. His reports combine residential and land sales in the market covered by the Real Estate Board of Greater Vancouver (REBGV).

      In his latest, Skipworth cautioned readers: “Please fasten your seat belts.”

      Last January, 2,454 sales were made in Greater Vancouver.

      The number represents a 53.1 percent increase from the 1,602 sales in January 2020. It also means a 119.1 percent rise over 1,120 deals in January of 2019.

      The report also notes that the January 2021 figure constitutes a 28 percent increase from January of 2015, which is “long considered the peak year for Greater Vancouver housing sales”.

      “Another telling stat: during the boom year of 2015, the benchmark January home price was $648,700,” the report continues. “This January it was $1,056,600. Yes, we are into an unprecedented seller’s market.”

      The high number of sales in January 2021 was coupled with declining listings.

      “Total active listings in January 2021 were 8,820, down from 9,307 in January 2020 and from 11,427 in January 2018,” the report notes.

      With the current pace of sales, there is a “mere four months of inventory in the entire Greater Vancouver housing market”.

      Kevin Shipworth

      Bidding wars expected to continue

      The strong January 2021 start comes on the heels of a record year for real estate.

      In a report on January 5, the REBGV stated that 30,944 homes sold in 2020. That number represents a 22.1 percent increase from the 25,351 sales recorded in 2019.

      The REBGV covers Vancouver, Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows, Port Coquitlam, Port Moody, Richmond, South Delta, Squamish, the Sunshine Coast, West Vancouver, and Whistler.

      Also on January 5, the Fraser Valley Real Estate Board (FVREB) reported that 19,926 homes changed hands in that region in 2020.

      The number indicates an increase of 28.7 percent from the 2019 figure of 15,487 sales.

      The FVREB covers North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission.

      The market also performed well on a national level despite the COVID-19 pandemic.

      In a January 15 report, the Canadian Real Estate Association stated that 551,392 homes were sold in 2020. This represents a 12.6 percent increase from 2019.

      Robert Hogue prepares housing-market analysis and forecasts with RBC Economics. He wrote in a January 13, 2021report that the 2020 market was “full of bidding wars, escalating prices and exasperated buyers unable to find a home they can afford”.

      “We expect this to largely continue in 2021,” the economist predicted. “We see little that will stop activity or prices from reaching new heights in the year ahead.”

      Hogue projected that the national benchmark price will rise 8.4 percent, to $669,000. Meanwhile, home resales are expected to increase 6.5 percent, to 588,300 units.

      Statistics Canada also forecasts a strong market for homes in 2021.

      In a report on February 4 this year, the federal agency observed that residential construction costs rose 6.6 percent in the fourth quarter of 2020 compared to the same period in 2019.

      Statistics Canada explained that the increase was due to the high demand for housing and a shortage of lumber for construction.

      As for 2021, the agency noted: “Shifts in homebuyers’ preferences to accommodate working from home combined with historically low interest rates and increased optimism for the reopening of the economy as the vaccine rollout begins are factors that should continue to drive demand for housing and put upward pressure on residential building construction prices.”

      Dexter Realty’s Skipworth said those factors and more will drive the market this year.

      In addition to low interest rates and pandemic-induced moves by people looking for either different homes or bigger spaces, Skipworth said that many have also saved more money for a house down payment. There wasn’t much to do in 2020 because of travel and lifestyle restrictions.

      Likewise, there will be first-time buyers coming into the market. Plus, people who put off buying during the past few years may make their purchase this year.

      For the bottom line, Skipworth said, “It will be a busy year in real estate.”