Prospective homebuyers remained on the sidelines in Metro Vancouver in March as home sales dipped to the lowest levels in decades.
REALTORS registered about 1,700 homes sales on the regions MLS last month, the lowest total for the month since 1986. This is a 31% decline from the same period last year and is 46% below the 10 year March average.
On the supply side, the number of homes for sale continues to increase in the region. About 4,900 homes were new added to the MLS in March earning the total number of homes currently for sale to about 12, 700. This is up 52% from same time last year.
Like all markets home prices are dictated by supply and demand. We measure this by looking at the total inventory of homes for sale and compare it to the number of sales during the month. We call this the sales-to-active listings ratio. This ratio for all property types across Metro Vancouver today s 13% which is on the border between a balanced and buyer’s market. Broken down by house type we see detached homes firmly in buyer’s market territory and townhomes and condo’s remain in the balanced state for the time being.
The benchmark price for all housing types for Metro Vancouver is just over one million dollars. This is down 8% from last year. This decline is more pronounced in the detached home market while townhome and apartments have seen modest declines the last twelve months.
Overall housing demand today isn’t aligning with our growing economy and shrinking unemployment rate. These market trends are largely policy induced. For three years governments at all levels have imposed new taxes and borrowing requirements onto the housing market. What policy makers aren’t recognizing is that demand side measures don’t eliminate demand. They sideline potential home buyers in the short term. This is what we are seeing today.
In any housing market pent-up demand is ultimately satisfied down the line because shelter needs don’t go away. Using public policy to delay housing market demand just feeds disruptive cycles that have so well documented in our region over the years.