BCREA sales forecast for 2021, 15 percent higher than 2020
2021 home sales will rival 2016 boom year, says B.C. Real Estate Association
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The Vancouver Sun
The market for single-family detached houses is so hot in Metro Vancouver that a realtor booked 130 tours of a Cloverdale home before turning away other potential customers.
“So sorry! Showings completely full, for every 15-minute slot. Can’t fit any more in, sorry. Do not show up without appointment,” a note on the Multiple Listing Service said last week for the house, which had an asking price of $1.05 million
“We have had over 130 showings booked in 24 hours.”
The B.C. Real Estate Association has just forecast sales for 2021 that are the highest since 2016, when home sales and prices in Metro made international headlines for their stratospheric climbs.
In 2016, there were 112,000 unit sales. For 2021, the Association is forecasting just under 109,000 sales. It’s forecasting a 15.6 per cent rise in sales over 2020 and a 7.7 per cent rise in the MLS average price for 2021, followed by another 3 per cent in 2022.
Last summer, real estate agents described pent-up demand for detached homes following the pandemic shutdown. They said this trend has been sustained as some buyers who want more space, often because they are now working at home, also have more purchasing power with lower interest rates. Overall, however, they weren’t seeing the dynamics of the boom years of 2015, 2016 and 2017.
Now, some of them are starting to sense a boom.
“The market is really hot right now and it’s not slowing down,” said Vancouver real estate agent Steve Saretsky. “Most of the froth is in the single family housing market. It’s insanely competitive and comparable to 2016. The condo market is much more balanced though, and buyers can take more time to sift through the inventory.”
“Single family inventory for sale is near record lowest on record. If you’re looking for a house under $2m, there’s 1.6 months of supply. That’s insanely tight and is creating bidding wars. People are seeing prices getting bid up, and now there’s a fear of being priced out.”
Marion Chekaluk, co-founder of Ecom Appraisals Inc. said mid-December to mid-January is usually a very slow time of year for the appraisers and lawyers who process real estate transactions.
But in recent weeks, everyone in her office has been “absolutely run off their feet. I’m getting lenders calling constantly. I had three this (Monday) morning, saying ‘a deal is supposed to happen,’ that ‘subjects need to be removed today. And we’re waiting on this report. You saw the property on Friday.’ They’re asking our appraisers not to take a weekend and I’m saying to them, ‘no, you take your weekend. Because if not, you’ll get burned out.”
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“The whole thing is challenging,” said Chekaluk, referring to the pandemic. “We can’t go into properties. … We are trying to support the value for refinancing, which is not always an easy task.”
She said it’s not easy to make appraisals in a market where sales are happening quickly and appraisers have to make many adjustments to their calculations.
Chief economist Brendon Ogmundson of the real estate association said that interest rates in 2016 were 2.5 per cent. Now, they are at 1.8 per cent, and “that drop is a huge stimulus and is one of the largest reasons what’s happening.”
Other factors include optimism about an economic recovery after the pandemic and a segment of buyers with savings still on the sidelines, said Ogmundson.
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