Metro Vancouver’s once hot housing market is experiencing an “expectation gap” between buyers and sellers as the benchmark property price fell under $1 million for the first time since May 2017.
“Sellers are often trying to get yesterday’s values for their homes, while buyers are taking a cautious, wait-and-see approach,” Ashley Smith, the real estate board’s president, said in a statement.
The composite benchmark price for detached houses, townhomes and condos in Metro Vancouver was $998,700 in June, said the Real Estate Board of Greater Vancouver. That’s down 9.6% from the same time last year and 0.8% from May.
Detached houses saw the biggest drop, falling 10.9% from June 2018 to $1,423,500. However, the price inched forward month-over-month, up 0.1% since May.
Townhomes fell 8.6% to $774,700 and condos dropped 8.9% to $654,700. Both also saw month-over-month drops with townhomes losing 0.6% and condos 1.4% compared to May.
Prices dropped as the area recorded the lowest number of home sales last month than any June in nearly two decades.
The board says 2,077 homes sold in June 2019—down 14.4% from the same month last year, down 34.7% from the 10-year June sales average and the lowest June total since 2000.
Condos experienced the biggest slowdown. In June, sales of condos fell 24.1% compared with a year ago to 941. Meanwhile, townhome sales last month dropped nearly seven% and detached home sales fell 2.6% compared with June 2018.
The number of newly listed homes also fell, dropping 10% from June 2018 to 4,751 homes across all categories. However, the total number of homes listed for sale rose 25.3% from June 2018 to 14,968 homes in June 2019.
The sales-to-active-listings ratio, a key measure that indicates whether it’s a buyers’ or sellers’ market, was 13.9% for all property types in June. It dropped to 11.4% for just detached homes, but rose to 15.8% for townhomes and 15.7% for condos.
A ratio under 12% for a sustained period suggested downward pressure on home prices will occur, while upward pressure is expected when the ratio exceeds 20% for several months.
“Home buyers haven’t had this much selection to choose from in five years,” said Smith, adding sellers need to price their homes accordingly to be successful in the current market.