For the last few months I’ve been talking about the curious slowing of price increases for detached homes in Metro Vancouver. The benchmark price in September for a detached property was $1,617, 300, which is only 0.1 per cent higher than August. That’s a remarkable decline in the month-over- month rate of increase, recalling that in July the benchmark price rose above $1-million for the first time. Obviously, there was a big spike as the price moved quickly to the mid-range between $1-million and $2-million.
So, a good question now is why has it levelled off in the last couple of months? Is demand declining at this price point? I believe there are a combination of factors that need to be considered. A general price equilibrium, even for a short period, is also a function of supply – in other words, the available housing stock. If there are a relatively higher number of listings for comparable detached properties, price can become a more competitive issue for the seller. Alternatively, on the buyers’ side, a shift to other types of housing appears to be occurring at this price level. Last month, the ratio of sales to active listings was approximately 15 per cent for detached homes, while townhouses and apartments made up the rest. By way of a general observation then, it appears that the detached home benchmark price is going to remain stable as long as there are new detached listings coming onstream and the supply of townhouses and apartments also remains strong. I would therefore advise those clients who are committed to buying a detached home, that now is a time to strike. This market segment is always going to increase in the long term, so take advantage of a period when price escalation has slowed. For the rest of my clients who are looking at townhouses and apartments, here are my suggestions for good opportunities based on the latest figures.
For townhouses, the benchmark price for September in the Greater Vancouver area was $786,600, while in the Lower Mainland it was $661,600. At less than 50 per cent of the price for a detached home, this category of home is very attractive to young families, many on starting salaries and therefore wanting affordable monthly mortgage payments. This month I have selected some municipalities that have good value while staying on the lower side of average price for the Lower Mainland. These include: Coquitlam at $641,400; Burnaby (East) at $636,500; Port Coquitlam at $635,400; Port Moody at $605,400; Pitt Meadows at $572,900; and Maple Ridge at $514,600.
For apartments, the benchmark price for September in Greater Vancouver was $635,800; and in the Lower Mainland $585,300. Again, I have selected some municipalities which have average prices on the lower side of the Lower Mainland benchmark in order to assist a large number of clients who are on limited budgets. I have excluded Whistler and Squamish in this selection, although there are some attractively priced apartments in these areas if you wish to live father out. For others, I suggest looking in Burnaby North with a bench mark price at $576,700; North Vancouver at $553,500; New Westminster at $488,600; Coquitlam at $482,300; Ladner at $422,800; Tsawwassen at $451,600; Port Coquitlam at $414,200; Pitt Meadows at $392,300; and Maple Ridge at $262,400.
Fraser Valley
Here’s some really interesting news! If you’ve been following my contest for predicting the month when the Benchmark Price for a single detached home in the Fraser Valley would exceed $1-million, you probably bet the winner would be announced this month. In July, the benchmark price for a Fraser Valley single detached residence was $966,000. It couldn’t get much closer then, but now in September, it has declined to $974,500. Will we see it break the $1-million mark this year, or will it continue to decline? I have now changed the rules of my contest to include guesses in either direction. If you can predict – within 0.25 per cent – how much the benchmark price for a detached residence in the Fraser Valley will change by the end of this month, I will prepare a customized Comparative Market Analysis (CMA) of your current property. Each CMA is an estimate of the owner’s house value using its condition, (neighbourhood study), real estate market study, and recently sold homes in the same area.
Send your guesses to zhangsibo@hotmail.com by the end of this month. Be sure to include your name and phone number so we can collaborate on your CMA. Winners will be announced in my newsletter and on my website www.liveincentralcity.ca.
Looking at other types of residences in the Valley, we see the opposite trend. Benchmark prices for both townhouses and apartments increased month of month – 1.4 per cent higher for townhouses (now $498,900), and 2.5 per cent higher for apartments (now $358,200). These increases are understandable since the Fraser Valley is still a popular area for young families and singles who are purchasing their first residence. For these home seekers, I have again selected some areas in price ranges about equal distance on each side of the benchmark price.
For townhouses, these areas are: Langley at $465,200; North Surrey at $507,900; and Surrey at $534,000.
For apartments, look in the areas of: North Delta at $333,000; North Surrey at $344,000; Surrey at $350,900; Langley at $368,500; and Cloverdale at $415,400.
Please let me know if you have a specific price range or other features in mind for the home you are seeking. I can also help you determine an affordable mortgage for your income and the equity you can build in your home. I love to crunch numbers and to help my clients in any way I can.
Thanks for reading!
Sibo Zhang, REALTOR®