Sales and prices are down – but specific buyers are finding good deals if they’re in a position to purchase
A “very challenging” economic environment is continuing to weigh down homebuying activity across British Columbia, the province’s real estate association said on Wednesday, as home sales and prices fell further in March.
Residential sales were 3.6% lower than the same month last year, slipping to 5,766 units, while the average MLS residential price ticked 2% lower amid that milder pace of homebuying.
In Metro Vancouver – typically one of BC’s hottest real estate markets – sales were down 2.8% year over year, and the city’s MLS Home Price Index composite benchmark slid by 6.8% compared with 12 months prior, according to Greater Vancouver Realtors.
That points to a market where homebuyers are still reluctant to take the plunge amid geopolitical strain and economic uncertainty – but purchase activity still isn’t dead on the ground.
For individuals who are in a comfortable position to buy, the market is presenting some opportunities to snag a deal with the pendulum having swung firmly in favour of buyers, Vancouver broker Kyle Green (pictured top) told Canadian Mortgage Professional.
“A lot of our buyers are not necessarily real estate investors, but they might have an investor slant – meaning that in general, they might be more likely or more willing to be too early to the party than too late to the party,” he said.
“They’d rather not have to wait until they know [the market] is at the bottom and then buy because that’s impossible to time. And frankly, once you know you were at the bottom, you’re usually a bit too late and now you’re competing with other buyers.”
‘It’s much easier to get a deal when you’re the only buyer showing up’
Being in a position to strike a better deal with the seller is an attractive prospect for many buyers who were previously dissuaded by rampant speculation and frenzied bidding wars in the red-hot markets of the early 2020s, Green said – although competition for certain property types still hasn’t faded entirely.
“I think a lot of my clients in general prefer to buy in a market where they can negotiate harder with the seller,” he said. “This is a good climate for that. It’s much easier to get a deal when you’re the only buyer that’s showing up to the open house.”
But buyers who want to move ahead with a purchase also aren’t in any rush, and while they aren’t prepared to wait indefinitely, they’re also comfortable to wait until exactly the right property becomes available.
That unwillingness to settle means competition in the market is now highly concentrated, with quality and reasonably priced properties still seeing plenty of interest even if bidding isn’t as fierce as during the COVID-19 pandemic.
“Like in all markets, if the property is good and it’s priced right, then there’s still competition,” Green said. “I’ve had a couple of clients lose out on properties in multiple-offer situations. So that still occurs, but it really just depends on the situation.”
Why some sellers aren’t dissuaded by lower sales prices
A down market with lower prices and fewer buyers can also sometimes dissuade homeowners from listing their properties because they aren’t convinced it makes sense to sell up in the current environment at a discount.
That’s not necessarily the case for mover-uppers in the current Vancouver market, according to Green, because while homeowners are often selling for a smaller sum than they might have commanded a year or two earlier, they’re also taking advantage of lower prices when purchasing the home they’re moving into.
“In general, it’s a lot of individual homeowners that are buying a home and a lot of people that are looking at upgrading,” he said. “There are probably a lot of upsizers at this moment because in theory, yes – it would suck on the sale. Maybe the market’s down 10% overall and you’re selling a condo and buying a detached.
“You might be losing 10% on your million-dollar condo: $100,000. But if you’re upgrading and buying a $3 million home that’s now 10% lower, you’ve saved $300,000 on the buy. So it’s actually not a bad time to upgrade in a down market. Often, you’re saving more on the buy than you lost on the sale.”
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