market tailwinds drive a flurry of buying activity in July While the headlines continue to foment anxiety over the future of our economy, the fine print details myriad factors that are supporting regional housing demand–to the tune of more than 5,000 sales last month.
Resilient, if disconnected, stock market performance that has preserved accumulated wealth: the S&P 500 has re-attained its pre-pandemic high while the NASDAQ has surpassed it. Local pent-up housing demand: as noted in previous columns, the equivalent of 11,000 unrealized sales accumulated in the first 6 months of 2020. A jobs base that has been beaten, yes, but not broken: Metro Vancouver has re-gained almost 120,000 jobs in the past two months. Together, these factors have stabilized the housing market in the face of a widespread, policy-driven economic downturn and are likely to continue to do so in the coming months.
After a strong showing in June, the real estate market in the Vancouver Region surprised many in July as it tallied 5,150 MLS sales, the first time the 5,000-sale threshold had been crossed since June 2017 (a span of 37 months). This was 27% more sales than in June, 31% more than in July 2019, and 21% more than the past-decade average for July. Within the Vancouver Region, the Greater Vancouver board area registered more than 3,000 sales for the first time since June 2017, and the Fraser Valley board area surpassed 2,000 sales for the first time since...you guessed it, June 2017. No matter how you cut it, July was a very active month for residential real estate throughout British Columbia’s southwest corner. In some ways, the sheer number of transactions that have taken place over the past couple of months (including more than 4,000 in June) seems counterintuitive, if not
unsustainable, given the current economic climate. Overall, employment in Metro Vancouver in July was down 10% from its pre-Great Suppression high in February, and 12% below its trend level for the month. The regional unemployment rate, at 11.6%, is almost three times its early-2020 level. In addition to the economic pains being experienced by many in the here and now, there exists much uncertainty about the future path of economic recovery for the region, the province, and the country. While all of the above is true, it is incomplete. Indeed, a more considered view of a few of the governing features of the Vancouver Region’s housing market reveals numerous tailwinds underpinning activity, including the following. The availability of historically cheap money: borrowers can currently lock in at 2.14%– and in some cases even lower–for five years.
Copyright © 2020 rennie group of companies. All rights reserved. This material may not be reproduced or distributed, in whole or in part, without the prior written permission of the rennie group of companies. Current as of August 7, 2020. All data from Real Estate Board of Greater Vancouver and Fraser Valley & Rennie. While the information and data contained herein has been obtained from sources deemed reliable, accuracy cannot be guaranteed. rennie group of companies does not assume responsibility or liability for any inaccuracies. The recipient of the information should take steps as the recipient may deem necessary to verify the information prior to placing any reliance upon the information. The information contained within this report should not be used as an opinion of value, such opinions should and can be obtained from a rennie and associates advisor. All information is subject to change and any property may be withdrawn from the market at any time without notice or obligation to the recipient from rennie group of companies. E.&O.E. 3
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