While home sales across the Lower Mainland fell in april for the second month in a row, some experts say the slowdown could bring more stability to the market.
The Greater Vancouver Real Estate Board reported that home sales were down 25 percent from the previous month. The drop is quite pronounced in the Fraser Valley, where home sales fell 36.6 percent from March to April.
Adil Dinani, Metro Vancouver broker at Royal LePage West, said the slowdown is healthy after the red-hot 2021 market.
“We are moving from an overheated market to what I would say is now more of a balanced, normalized market environment.”
Over the past two years, houses in the Lower Mainland have been selling quickly and well above asking price, with multiple offers on the table, according to Dinani.
Dinani is now spending more time educating sellers on the changing market and making sure homes are priced accordingly.
“We were in a market 12 months ago that was uncomfortable for us as practitioners, uncomfortable for buyers and somewhat insecure for sellers.”
The slowdown is seen across the province, with the British Columbia Real Estate Association reporting that home sales in the province fell 24.1 percent in March 2022 compared to March 2021.
Dinani said the drop in sales represents a good opportunity for buyers, who have faced a fiercely competitive market in recent years.
“Frustrating and Disappointing”
After a three-year search, Port Alberni resident Michael Huber and his wife are in the final stages of buying their first home.
Huber said the search for a home was “very frustrating and disappointing”.
Huber and his wife, who are expecting their first child in the coming weeks, said affordability was one of the reasons they decided to move to Port Alberni.
“I’m 42 years old and I’ve been saving for a long time. I didn’t know I’d ever get the chance, given the real estate market,” said Huber.
During their search, they came across many homes with structural damage or homes requiring up to $100,000 in necessary repairs to make the home livable.
Huber said buyers were stealing and even fighting over these homes, with bids well above the asking price.
“I felt like I was being cheated.”
Huber said that in order to get their home, they skipped a home inspection because they knew their offer wouldn’t have been accepted. They paid $51,000 above the asking price.
“We just went out of our way to be educated in what seems like a good deal and what won’t crumble under our feet,” said Huber.
Rising interest rates
Andrey Pavlov, a professor of finance at Simon Fraser University, said the slowdown in home sales is a step toward stability.
“It’s a very difficult market for both buyers and sellers. It’s stressful, and nobody likes that. And it’s clearly not sustainable.”
However, Pavlov does not view the current market as a buyer’s market,
“This is a more normal market that can satisfy both buyers and sellers.”
Pavlov said the recent drop in revenue is caused by the Bank of Canada raising interest rates to curb inflation.
Pavlov advised buyers to prioritize finding a place to live for several years to take advantage of the long-term appreciation.
“Make sure you buy a place that you like and can stay for a long time and a place that you can manage financially reasonably.”