IT’S NOT ALL APPLES TO APPLES.
TURNOVER RATES VANCOUVER WESTSIDE 2018
DEFINING THE MARKET BY PRODUCT: When looking at the market, as well as educating yourself on the conditions therein, it is important to consider the market as one of many combined segments. Each segment, as in this case Houses vs. Condos vs. Townhouses, perform separate of each other and can be influenced by different factors.
2018 showed a sharp contrast amongst these 3 markets. We are using what we in the industry call the Absorption Rate - in layman's terms, the turnover rate, of sales to listings. A healthy, balanced market with relatively flat prices is anywhere from 12-20%. A Buyer’s market is defined as under 12% absorption, whereas a Seller’s market above 20%.
Referencing the data charted above (interactive, hover mouse to view data), you’ll notice that the market for detached houses has remained relatively flat and not managed to step out of a Buyer’s market. Having been in such state for a couple of years now, has had a downward pressure on this product category, with benchmark prices having dropped 11.8% year over year.
Townhouses began the year in a balanced market, before surging into a Seller’s market throughout the Spring, and gradually dropping back into a balanced market towards the end of the year. This has resulted in a flat price performance for the segment, with benchmark prices remaining unchanged year over year.
Finally Condos, have seen the most dramatic change. The start of the year saw condos in extreme Seller’s territory with turnover rates near 50%. This led to a “Frenzy" mentality amongst buyers in which one felt lucky just to get into the market. Typical throughout 2018 up until late Spring, was seeing multiple offers on nearly every condo listing within one week of listing, many of which came in cash with no conditions and above asking prices. That narrative began to change with Summer, at which time condos remained in Seller’s territory but a more relaxed pace of turnover in the 20-40% range. Fall saw a gradual decrease in turnover rates with this segment slipping into a balanced market. Having swung from an extreme Seller’s market to a balanced market, prices year over year are down 2.9%.