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Buyer’s Market vs a Seller’s Market

 

Sunshine Coast Real Estate Active Listings Graph

 

 

The story going into the 2017 Spring Market is easily the listing count.  Despite hearing reports of markets correcting or facing headwinds, the listing count tells the tale.  And it is amazing how much difference 5 years can make.  While we saw a peak number of listings in 2014, the inventory had crept up after the financial meltdown in 2008 and a distinct lack of buyers meant that sellers were piling up against buyers and the market bounced around a sales-to-listing ratio (SLR) of 4-7% for a few years.  This resulted in 2016 numbers reflecting a perfect storm of demand meeting supply.  We saw historic volumes that we should can’t expect to see for another generation.

 

For those that don’t know, under 15% SLR is considered a “Buyer’s Market” which means fewer buyers than sellers and price pressure going down.  15-22% is considered a “Balanced Market” which means price stability and demand being met with supply and above 22% it is considered a “Seller’s Market” and there is pressure on prices to rise.  This past week’s SLR was 23%.  As we move into our first real period of decent weather in months with a listing count at the lowest level in 20 years, the picture remains clear – unless there is a major economic event, we will see a very buoyant market in 2017.

 

Buyers will be under pressure to make quick decisions but I think they will be rewarded.  Sellers will continue to be of the mind to make a bit more money.  As a caveat, the SLR is down from a high of 35% last year, and 23% isn’t a robust Seller’s Market. Thus, caution on price expectations is in order, but it is fair to remain optimistic that values are going to see a notable bump sooner than later.  The upshot is that if you are thinking of taking advantage of the market now is the time to act.  Send me an email if you want to have a chat on how the market is affecting your plans.

 

Talk to you next week!

 

Cheers, 

Gord 

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Weekly Report - March 7-12, 2017

Our brokerage puts out weekly reports highlighting important topics and statistics in Sunshine Coast real estate trends.  Here's the latest from the RE/MAX Oceanview office in Sechelt.

 

 

"It takes a lot of skill, training and experience to competently price a home. Agents must know the market inside and out in order to put together a professional evaluation. After all, there is much on the line. Price it too high and your home won’t sell. Price it too low and we leave money on the table.  Of course, it helps to be the top selling office on the Coast since 1996. All those transactions over all those years means our Agents have superior experience and judgment on pricing. The first step is to tour your home. You know your home better than we do, so we’ll be asking a lot of questions. We’ll have our tape measure handy, a plot plan of your property and a note pad. Once our questions have been answered and the data has been jotted down we take everything back to the office and the real work begins. How do recent sales compare to the subject property? Same thing for current listings. What recent trends are developing and who are our likely buyers? Putting all this divergent data together into a coherent professional report takes a lot of skill. But a coherent professional report is exactly what you need to help set your price and handle the negotiations. For more on pricing and everything else about the market, call your RE/MAX Oceanview Agent today."


The Numbers:


SALES THIS WEEK:  18 [SUNSHINE  COAST, ALL OFFICES]


DETACHED

ATTACHED

LAND

OTHER

13

2

3

0

 

PRICE RANGE


0 - 300K

$300K - $500K

$500K - $1M

$1M+

4

4

9

1

 

AREA


PENDER H.

HALFMOON B

SECHELT

ROBERTS C

GIBSONS

1

3

4

1

9

 

NEW LISTINGS THIS WEEK: 36        DET. SALES, PAST 30 DAYS 


DETACHED

ATTACHED

LAND

2016

2017

21

4

11

133

50

 

CURRENT LISTINGS: 489   

 

DETACHED

ATTACHED

LAND

LOW – HIGH

220

49

220

453   -   1396


DET’D  SALES to LIST  RATIO23%

                                                                                                    

SALES/LIST

RATIO

       0 – 11%

BUYERS MARKET

          12  -  19%

          BALANCED

        20% and up

   SELLERS  MARKET


*The Sales/Listings Ratio is a guide to market conditions. A value below 12% puts downward

pressure on prices. 12 – 19% reflects a balanced market. Over 20% puts upward pressure on prices.


 

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Snow & Sleet = Slower market

 

Sometimes the cold and wet seems to put a damper on real estate activity! Earlier this year I suggested that we keep an eye on the number of new homes coming onto the market vs. the number being sold as an indicator of where trends are going. At this point of the year, inventory has been slowly but steadily growing. We have seen about 17 new listings a week versus 11 sales per week for the past couple of months. This is great news for buyers who continue to struggle finding choices, and it is true that we desperately need new listings to slow price increases down. The upshot is that early 2017 is shaping up to be a much more balanced market than last season.


Should these trends continue it will mean price moderations and stabilizing values. Of interest, though, is whether the weather is keeping a lid on activity, particularly in the face of the coldest winter we have seen in almost 30 years. Conditions like this can create pent up demand, and market trends can change quickly with a couple of big weeks like we had last year. Still, indicators are showing a more conservative mood out there. Seller expectations remain high which sets up an interesting dynamic.

 

While I am still of the opinion that we will see price increases as we get deeper into the Spring, recent events signal that those thinking of selling should keep an eye on the general trends before getting overly optimistic on prices. That being said, despite the increase in product choices for buyers we continue to see multiple and competing bids on those properties that are priced sharply. For buyers, acting quickly remains both difficult and necessary if you see something you like.

 

The market remains very much in flux and the next few weeks should be an excellent indication of what we can expect for the balance of the year. Let’s hope we finally see some daffodils and sunshine!

 

Talk to you next week,

 

-Gord

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Mixed Signals are becoming routine.

 

Here we are rapidly approaching the Spring market. It is fair to say the industry is expecting brisk activity, but how the market will actually unfold remains to be seen.  Despite news coming out of the Lower Mainland of a significant slow-down in actual sales, the situation that is not being weighted is the low inventory throughout the region and apparently the Province.  Demand remains strong, and with this lower inventory, basic economics would suggest that we are going to continue to see prices increase.  However, there needs to be warnings and caution to those entering the market.

 

Prices on the Sunshine Coast are reaching new highs, but the question is: where can it go from here?  My biggest concern remains how sustainable our prices are, and when an eventual slow-down will occur.  This week I pulled an ad from the Squamish area which is showing a very ordinary rancher in the $700k range and a more elaborate one in the high $800’s.  These are tremendous numbers that are starting to reflect pricing in North Vancouver.  But there are major differences between the Coast market and the Sea to Sky, namely the amount of economy and industry that flows throughout that area.  North Vancouver is bustling with billions of dollars going into ship building, and the Sea to Sky is easily manages billions in tourism dollars.  Squamish is also sandwiched between Whistler and West Vancouver which have the highest real estate values in the country so there is the rub!

 

The Sunshine Coast, on the other hand, remains a very optional retirement area with a largely undeveloped tourism industry and zero manufacturing (Coastal Craft aside).  Therefore our local market conditions will be more subject to retirees entering the market and the general consumer confidence in the Lower Mainland.  We are also anticipating increased costs of borrowing this summer with the Canadian economy doing quite well and our lower dollar providing incentives for exports.  So while I do predict that our prices will rise this year, I see some increasing stresses coming to bear towards the end of 2017 and into 2018.  This all translates into maintaining a balanced attitude toward where our market can go, and should make decisions a little more challenging for both buyers and sellers.

 

Bottom line? All parties should proceed with cautious optimism with a left eye on the trends. 

 

Next week we will review what those trends are looking like - I made some predictions earlier this year so let’s review and revisit to see how things are shaping up. 

 

Have a great day and if you are in the market or know someone entering it, let me know and I’m always happy to provide a free market evaluation and report for your area of interest. 

 

Cheers,

Gord

 

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