Prices, Sales Drop, Inventory Increases

Summer Arrives on the West Coast

Kitts Beach in Vancouver was busy last week as people took advantage of record high temperatures to catch some sun. By the weekend, temperatures had returned to normal.

And after a record setting eight year expansion, by all metrics, Greater Vancouver's real estate market has also returned to normal.

The region saw 2,425 sales registered through the Multiple Listing Service in June, a 43-per-cent decline from the same month a year ago.

At the same time, owners listed 6,546 properties, an 18 per cent increase from the same month a year ago.

At June 30, Greater Vancouver's inventory of unsold properties stood at 18,260, a 54-per-cent increase from a year ago. That is nine months of inventory, a key indicator of a buyer's market and a harbinger of declining prices.

June's average price dropped from May, a trend that started in March. Prices are up about 6% year-over-year.

With the flattening of the real estate market along both the West Coast and all of Canada, real estate joins a number of other investment categories showing little or no opportunities. Mutual funds, the equity markets and fixed income markets are all weak. The only growth appears to be in select commodities, a market which is highly specialized and not-at-all for the average investor.

Any recommendations we make are general in nature only, and specific investor objectives and circumstances will impact recommendations. In general, this is a very good time for real estate investors to consolidate their positions and remain liquid by holding assets easily converted to cash, as well as having lines-of-credit pre-approved. Investors who know they have to sell real estate on the West Coast in the next 2-4 years should sell now.