Market nuances north and south of the Fraser River
It’s not quite a "tale of two markets," but the differences are apparent when you overlay two graphs from the Fraser Valley Real Estate Board (FVREB) and Real Estate Board of Greater Vancouver (REBGV) showing the ratio of sales to active listings over the past year.
Comparing the volume of sales to available inventory is a common market "barometre" used by industry analysts including senior economists at both the BC Real Estate Association and Canada Mortgage and Housing Corporation. FVREB also features a sales-to-actives graph comparing 10 years of data in our monthly statistical package.
When the ratio of sales to actives is in the range of 18 to 22 per cent, the market is considered balanced. When it starts to rise above 22 per cent, the market is starting to favour sellers and vice versa, buyers are in the driver’s seat when it’s below 18. Of course, there is wiggle room on either side of the balance range.
A member recently posed the question, what does our graph look like for the past 12 months only? We took that suggestion one step further to also compare it to that of Greater Vancouver.
REBGV was in a solid sellers’ market in August and September of 2009, while Fraser Valley was in balanced territory. In November and December, the differences were even more noticeable as Fraser Valley hovered on the brink of a buyers’ market, while conditions in Greater Vancouver still favoured sellers.
Both boards show the same trends of the market slowing at the beginning of 2010 followed by a quick recovery in the spring and then another downturn this past summer. Note that Fraser Valley’s market generally tends to favour buyers except for June of 2010, when the pre-HST rush inched us towards balance again.
Why the differences? Deanna Horn, FVREB President, says, "Although our two markets work in tandem, there are subtleties to each that only REALTORS® would be aware of, underlining the value for members of the public of working with their local REALTOR®."
The two Boards’ market ePolls for the past year show that for REBGV, first-time buyers represent an average of 40 per cent of their market. In Fraser Valley, the average was 32 per cent. People moving from outside Canada represent less than three per cent on average of Fraser Valley’s market, whereas in Greater Vancouver, it’s consistently more than double at seven per cent or higher every month.
Cameron Muir, Chief Economist, BCREA, says, "Canada is an attractive place to buy because of its stability. BC gets the cream of the crop of immigrants in Canada with 55 per cent of investor migrants coming here."
Looking forward, Muir expects to see market improvements on both sides of the Fraser River moving forward towards fall and winter: "The volatility in consumer demand characteristic of the past 24 months is expected to give way to more gradual improvement through 2011."
To read the current BCREA Housing Forecast Update, go to: www.bcrea.bc.ca/economics/HousingForecast.pdf.