Monthly the Real Estate Board of Greater Vancouver publishes a Housing Market Update. February has just been issued to say "Homebuyers and sellers activity exceeded historical averages in February.
There were 3,061 sales last month. This is up 21% compared to last year and sits about 20% above the ten year February average.
In terms of listings there were 5,425 homes for sale in February. That's up 15% from last year and 5% higher than the 10 year February average.
All total there are 11,898 homes for sale on MLS® in Metro Vancouver today. This is down 11% compared to last February.
Turning to home prices the benchmark price for residential properties in the region rose 6.4% over the last twelve months to $649,700. Detached homes continue to be the property type most in demand.
The benchmark price for a single family home increased almost 10% over the last twelve months while townhomes and condominiums increased 4 and 3 % respectively.
To help us better understand the strength of today's market we measure
homebuyer demand fueled by home sales (3,061) against homeseller supply fueled by the number of homes listed (11,898). This measurement today gives us a sales-to-active listing ratio of 25.7%. This is the highest the ratio has been in Metro Vancouver since March 2011.
Generally, analyst say the downward pressure on home prices occurs when the ratio dips below the 12% mark. Home prices often experience upward pressure when it reaches a 20 to 22% range in particular community for a sustained period of time.
What is the effect of demand on our housing market you might ask?
Let's start with explaining the basic economic principle 'prices rise when demand outpaces supply'. To gauge this within our housing market we measure the difference between home sales and home listings. This is way the sales-to-active listing ratio is such an important statistic for identifying the state of the market.
Next we look at how long it's taking on average for a house to sell on the market. This is another key indicator that underscores the effect demand is having on the supply of homes for sale.
As you can see here there is a close relationship between these measures and fluctuations in home prices. Analyzing these numbers together helps us better to understand what's happening in our market.