Vancouver Real Estate Market Update For February 2024

The Vancouver Life Real Estate Podcast

In January, the real estate market exhibited notable trends, providing insights into the trajectory of 2024. Total sales reached 1,427, marking a 39% increase from January 2023 and a 7% rise from December. However, this figure fell 20% below the 10-year seasonal average, signaling a slow start akin to the latter half of 2023.
New listings surged to 3,788, reflecting a 14.5% rise compared to January 2023 but remained 9% below the 10-year seasonal average. Meanwhile, inventory experienced a historic anomaly, dropping 2% from December to 8,221, the first time January inventory was lower than December. This unprecedented occurrence raises questions about a potential year of low inventory, stabilizing the market.
The market landscape shifted significantly over the past three weeks, with multiple offers becoming prevalent, particularly in the detached segment. The scarcity of available homes led to heightened competition and swift sales for desirable properties.
The sales-to-active ratio increased to 17.3%, up from 15.9%, marking the second consecutive monthly increase after six months of declines. Detached homes saw a 12% ratio, up by 1%, townhomes increased to 26%, up by 7%, and apartments reached 20%, up by 1%.
The average price in January was $1,161,300, indicating a 4.2% increase from January 2023 but a 0.6% decrease compared to December 2023. This decline marked the sixth consecutive monthly decrease, resulting in a total drop of 4% over six months and a $100,000 decrease since the peak in April 2022.
January witnessed a spike in activity likely because many are having discussions about potential 2024 rate cuts. However, the landscape continues to shift, almost daily, as bond yields rose, USA job numbers exceeded expectations, foreclosures remained minimal, and arrears rates stabilized or increased only slightly. Canada's GDP exhibited a 0.2% rise, suggesting economic acceleration after three months of flat growth.
The outlook for rate cuts has become more uncertain now than perhaps ever before. The job market remained stable with unemployment sitting at 5.8%, the economy expanded by 0.2%, and no significant signs of distress appeared. While markets initially priced in cuts starting in July, this could and will likely change given the evolving economic landscape.
Looking ahead to 2024 predictions include the absence of a renewal cliff as 50% of mortgages that were set to renew already have. 2024 will likely see a mirroring of 2023 with low inventory and below-average sales volumes, and a shift in the buyer demographic. We also look at the challenge of predicting where interest rates will go and what a realistic inflation band looks like.
Lastly, we touch on single-family homes, with building permits hitting a 45-year low translating to one new home for every 25 people added to the population - this is a disappearing asset class. Additionally, tear-downs are increasingly turning into duplexes or multiplexes, reducing available detached homes on land. The scarcity of single-family housing is anticipated to persist for at least the next few years, contributing to the rarity-driven dynamics of asset pricing.

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