October’s sales don’t go bump in the night The typical October spike in sales was absent from the Vancouver Region’s housing market as high interest rates continued to weigh on demand. Instead, it was the supply side of the ledger that saw an increase last month—another seasonal anomaly.
Looking ahead, we expect this sales/ inventory dynamic to prevail over the course of the next few months. Yes, sales typically do fall off in November and December as would-be buyers spend more time thinking about the holidays than real estate, but a steeper-than- usual contraction in transaction counts is in the cards this year. Meanwhile, inventory—which typically declines by about one-third during Q4 of a given year—will continue to fade through the balance of 2023, though by less than we’re used to as new listings remain elevated and homes sit on the market longer on account of idling would-be buyers. As these trends play out, we’ll see the total number of homes available for sale at the end of December sitting above the long-run December average— something that hasn’t happened in any month since July 2019.
Stop us if you’ve heard this one before: macroeconomic factors (including and especially high interest rates) are currently the biggest influences on our local housing market—not seasonality. And while this has been evident for many months now (as we documented in previous editions of the rennie review), the most recent month’s data on our local housing market further underscores the point. Indeed, while October is typically characterized by expanded sales counts and shrinking inventory, the opposite of this transpired last month. Let’s start with sales. Last month, there were 2,910 MLS transactions throughout the region, a count down slightly (0.2%) from the previous month. Notably, this stands in stark contrast to the typical seasonal change of an 8% September-to-October increase, with October also marking the fifth
consecutive monthly decline in sales and representing the lowest monthly total since February. Further, last month’s sales count was 33% lower than the past- decade October average. With fewer buyers participating in the market, the trend in inventory was opposite to that of sales: the 16,618 homes available for sale at the end of October represented a 1.7% increase from September, which was counter to the typical September-to-October contraction of 5%. Last month’s total listings were also 13% higher than a year earlier, and while not quite at the long-run average (2% below), they were still at their highest level of any month since October 2020. This dynamic of shrinking sales and expanded listings pushed the months- of-inventory (MOI) metric up to 5.7 in October, thereby denoting the presence of balanced market conditions overall.
Copyright © 2023 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 November 3, 2023. 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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