And just like that summer comes and goes. My family and I have had a great summer. We spent lots of quality time outdoors, taking in our beautiful city.
At the start of September, after working together for 7 years, Devin Roch and I have decided to formalize our partnership alongside our team. We are excited to now be known as the Roch & Weeks Real Estate Group.
On the real estate front, the past 3-4 months have been one of the slower markets we’ve worked in over the past 20 years. As interest rates rose multiple times, we saw buyers on the sidelines waiting for prices to drop. At the same time, sellers were hesitant to list their homes given the decreased demand from buyers. As a result, inventory levels remain low and there are fewer opportunities for buyers.
It will be interesting to see what happens as we enter the fall market, which is known as the second selling season in real estate. Fall often brings much needed new listings, as both buyers and sellers get back to their routines and life plans after the summer months. If we do see inventory increase this month, it will be interesting to see if buyers become more active, or if the waiting game continues.
In terms of prices, we have seen the greatest price decreases in the Fraser Valley and other suburban markets. Meanwhile, Vancouver has seen more modest price adjustments. Generally speaking, prices are down from February/March’s peak by 5-15% in Vancouver, whereas, we have seen as much as a 20% drop in the Fraser Valley. Given the level of income and down payment required to purchase a home in Vancouver, buyers that are active in the market here are less likely to be affected by interest rate hikes, especially in the luxury sectors of the market ($3 million plus). We are also noticing that “land value” properties are being hit the hardest in terms of price declines. This is a result of developers’ hesitation to buy into the market with the high cost of construction, rising rates, and softening prices of finished product. On the other end of the buyer spectrum, end users also seem to be focusing on “move-in ready” homes and have less desire to buy homes that require substantial renovations given the timelines from the city for permits and difficulty finding trades for reasonable prices.
Consequently, if you are thinking about selling and have a move-in ready home, you are still likely to sell for a relative premium, while fixer uppers and land value properties will need to be priced well if you want to sell in today’s market.
The Vancouver real estate market can move very quickly in either direction, and can often feel like a tap that is turned off or on overnight. There have been few “buyer’s markets” over the past 20 years, and they typically do not last very long. I think it’s fair to say that the current cycle we are experiencing could see prices continue to soften, however, I do not see this being a long term trend. There have been few opportunities to buy into Vancouver over the past 20 years without competing in multiple offer scenarios. If you look back in time, there have only been 3-4 years of buyers markets in the last 20, therefore, anytime there’s a downturn it’s proven historically to be a good time to buy. It’s human nature to hold out for the best possible time to buy and get the best deal possible, but the challenge has always been determining when exactly is the “perfect time”. Often by the time you’ve realized it, the market has already started to move in the other direction. We often take the approach that “time in the market” is more important for long term success than trying to perfectly “time the market”.
We continue to strive to provide the best service available to our clients and although we are in a tough market we have the tools and expertise to help you navigate and make sound real estate decisions. If you are interested in buying, selling, or acquiring investment properties don’t hesitate to reach out. You are also always welcome to stop by our office in Kerrisdale for a coffee.
We look forward to chatting with you soon.
Sincerely,
Patrick Weeks and Devin Roch
Roch and Weeks Real Estate Group