Saturday 31 August 2013

August Vancouver Sales Stats (preview)

End of August
2013 vs 2012 vs 2011
Sales: 2530 vs 1649(+53%**) vs 2378 (+6%)
Lists: 4100 vs 4044 (+1.4%)
Ratio: 62% vs 41%

Est. Month-end Inventory: 16250 vs 17567(-7.5%)
Est. MOI: 6.4 vs 10.7 (Aug/12) vs 5.6 (July/13)

As expected, Sales increased vs 2012, but still fell just below 10 year August Sales Average.

- looks like 2013′s trough MOI was probably reached on July: 5.6

Historical Trough MOI:
2013-07?: 5.6 (balanced market)
2012-03: 5.3 (balanced/seller’s market)
2011-03: 3.2 (seller’s market)
2010-03: 4.3 (seller’s market)
2009-07: 3.0 (seller’s market)
2008-02: 4.3 (seller’s market)
2007-05: 2.9 (seller’s market)
2006-05: 2.3 (seller’s market)
2005-06: 2.4 (seller’s market)

So this year, the best month for sellers was likely July. At MOI of 5.6, it still fell somewhat in “seller-side of balanced market” territory – which quickly edged back to “buyer-side of balanced market” by Aug/13.

With the low rate-holds gradually expire in September, we can expect sales to decline, with the MOI returning to firm “buyer’s market” territory (>>7) in the next couple months.

**With regards to “Sales 53% higher than last year”, don’t forget that in 2012, mortgage tightening rules were announced on June 20 and implemented on July 9, causing buyers to rush their purchases (pulled forward demand) in June/July. However, “demand” dried up by August, causing a -31% YoY sales decline in Aug/12 vs Aug/11, and a -33% YoY sales decline Sep/12 vs Sep/11.

This year, the trigger that draws demand forward was rising fixed rates, and that gradually took place starting Jun/13. Unlike the mortgage tightening last year, which took place with 19 days of advance warning, this year the buyers have 2-3 months of rate-hold to complete their purchase before facing a higher rate.

It can be expected that similar “Demand drying up” situation will occur this year, with the timing being mid-September to October.

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