Spring 2008 Market Update
As predicted in the last newsletter, prices accelerated so fast and there was such a high volume of sales last spring that the market needed the second half of the year to catch its breath. Even with this slower period taken into account, benchmark prices in the Westside detached market still rose by a staggering 27% from December 2006 to December 2007. As I write this in early February, it is a little early to tell if we are finally getting close to the top of this cycle of price increases. The sale of new homes and building lots is being buoyed by interest from mainland China. Local families however may need to see a bit more realism in the annual price increases if they are to able to keep up. By May or June it will become clearer. The desire to live in these premium family neighbourhoods has never been stronger but there has to be a way as well as a will. So, one of two things could happen. Either the local families will give up on their dream of owning on the Westside and look for better value elsewhere, leaving the Westside to overseas buyers from Europe and Asia with deeper pockets. Or more modest price increases will become palatable to local families and a more stable market will take hold. Watch this space!
2008 is continuing where 2007 left off: a very nicely balanced market. There are still plenty of Buyers (local, national and international) who are excited to buy in Vancouver and there is now sufficient choice for them that they will not be bullied into making poor buying decisions or paying over market value. Low interest rates continue to fuel the entry level of each part of the market. In the Downtown and Westside markets, one bedrooms under $350,000 and two bedrooms under $550,000 are still in high demand. Sales in these sectors should fuel the markets above them in the coming spring. The luxury condominium market is perhaps a little more vulnerable to the effects of a slowing US economy and an uncertain stock market. However my sense is that regardless of the price range, if the product is priced competitively it will still be snapped up. After a 14% increase in benchmark values last year in Vancouver West and with strong local economic indicators, a further more modest increase this year would appear to be realistic.