Greetings, valued clients and friends of Roch & Weeks Real Estate. We trust this newsletter finds you in good health and high spirits. As we transition into the vibrant colours of fall, we wanted to provide you with an update on the state of the Vancouver real estate market and share our insights into what the coming months might hold.
Reflecting on 2023 So Far
The market has been impacted by several increases in interest rates, but so far we’ve been surprised to see how inventory has remained at historic lows. We anticipate that to change as the reality of ‘higher for longer’ interest rates impacts homeowners and investors. For many investors that have variable interest rate mortgages, they’ve likely gone from cash flow positive to cash flow negative, and have had to start feeding their investment monthly. This has caused many of these owners to consider selling and exiting the rental market. For homeowners that bought over the last 2-3 years with fixed rate mortgages, they are starting to worry about their upcoming renewal. We anticipate many of these homeowners will struggle to keep up with payments, or in some cases, have difficulty qualifying for a renewal on their homes.
Looking ahead to the Fall
As we enter the second selling season of real estate, we suspect that more homes come onto the market. We will also see price reductions on properties that were on the market throughout the spring and summer that did not sell. This will definitely create more buying opportunities this fall. As predicted the Bank of Canada held rates yesterday, which is positive news for many homeowners, but we are now just starting to see the lagged effects of the past 18 months of interest rate hikes. As the effects start to make their way through the economy, there will unfortunately be difficult times ahead for many renters, investors and homeowners alike.
Supply Dynamics and Future Trends
Specific market segments and pockets of the city are experiencing low inventory, so as a result well-priced new listings within these segments are encountering substantial demand. Move-in ready detached homes in desirable neighborhoods remain scarce commodities, and this scarcity is projected to persist throughout the remainder of the year. Affordability is going to remain the challenge for buyers in this higher interest rate environment, and we don’t see that changing until we see interest rates lowering.
During these times of dynamic and ever-changing metrics, we believe it is important to be extra prudent when it comes to your real estate situation. If you’re considering your next real estate move, whether it’s a purchase or sale, we encourage you to reach out to us. Our dedicated team of 5 professionals, with over 50 combined years of experience, is here to provide full-service support.