If you are reading this blog post, then you are likely wondering how things will continue to shape up for the rest of this year? As I said in our first quarter analysis, the residential market was slower than expected out of the gate this year and whether or not that was the key factor, we have experienced lots of sales activity in the second quarter.
As we move into August we may have a minor slowdown, but I anticipate that we will have a relatively strong fall season, with a firm and balanced market overall (as always, with some outliers).
Here are some of the highlights from each of the three property segments in the second quarter:
The market for detached Homes has surpassed sales expectations in the second quarter, as unit sales climbed 31% above the same period in 2012 and 24% higher than the previous quarter. Year-to-date, total unit sales are up by 6%.
The top 5 neighbourhoods combined to represent 53% of all sales, or 243 units. The most notable increase in activity occurred in South Granville, which more than doubled its unit sales compared to the first quarter, increasing from 20 to 41
The prediction of a shift towards more stability has come to fruition, as the Westside’s detached Home segment produced a sales-to-new-listings ratio of 51%—a near perfect balance of 2 new listings added for every unit sold. However, this indicator tends to vary by price segment. For example, at the lower price points, the market has clearly shifted in favour of the listings priced between $1 million and $2 million, there was a combined sales-to-new-listings ratio of 71%. On the other hand, for listings priced above $4 million, a ratio of 34% indicates a slight advantage in favour of active buyers.
According to actual sales results, both the median and average sales prices across the Westside experienced minor dips in the second quarter; 0.5% and 3.7% respectively. In contrast to sales results, the HPI Benchmark Price actually grew by 2.2% for a typical detached Home on the Westside; a sign that prices won’t be dropping anytime soon. Of course, when digging down to the neighbourhood level, we see a greater variance in pricing trends. Kerrisdale could be considered one of the hottest Westside neighbourhoods right now, with a 3.0% gain in its Benchmark Price compared to the first quarter and an 80% gain in unit sales.
As we head into the summer real estate season, the Townhouse segment has remained stable. A sales-to-new-listings ratio of 53% is indicative of a well-balanced market. The most active price segment was between $600,001 and $700,000 with 49 new listings added and 25 units sold in the second quarter
Overall sales activity has been growing, with year-to-date sales settling 6% above 2012 levels. Second quarter sales were 25% higher than the same quarter last year and 33% higher than the first quarter of 2013. kitsilano led the way with 65 sales, up from 39 in the first quarter
Despite market stability, Townhouses are still selling quickly, returning to levels from 12 months previous. The median days- on-market has been on a steady downward trend since Q3 of 2012, settling at 22 days on market at the end of June. This is the shortest time on market of the three property categories – a strong incentive for Townhouse owners looking to make a quick sale before the fall season.
According to the MLS® HPI Benchmark Price, a typical Westside Townhouse is expected to sell for $708,200; this has remained essentially flat over the past 12 months. Actual sales results have shown slightly more variance in pricing trends, with the median sales price dropping to $849,000 from a high of $873,500 at the end of 2012.
The Condo segment in Vancouver showed strength in the second quarter, as unit sales climbed by 35% from the first quarter, evengrowing by 6% compared to the same quarter last year. Year-to-date unit sales are closing the gap compared to sales figures from 2012, lagging behind by just 6%.
According to both the average and median days on market, Condos are taking about 1 week longer than the same quarter last year. This is likely associated with the recent stabilization of the Westside Condo market. The sales-to-new-listings ratio has become more balanced at 55%; compared to 42% in the previous quarter.
In terms of trends, condo prices are difficult to summarize. For example, the average sales price was $637,397 at the end of the second quarter – the highest in the last 12 months; however, this figure was skewed by the sale of a $25,000,000 penthouse condo in Coal Harbour – the most expensive condo sale in the history of the Canadian MLS®. With the exclusion of this historic sale, the average sales price would have remained flat.
Vancouver’s downtown neighbourhood is experiencing particular strength at the moment, with its HPI Benchmark Price sitting 6.9% higher than 12 months ago and 4.6% higher than in Q1, reaching $407,200. Unit sales in this neighbourhood were also up compared to Q1, growing by an impressive 26% to 208 units.
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