As we head into day #4251 of isolation (not really, but doesn't it feel like it?), here is an update on the May 2020 Real Estate Market in Greater Vancouver.
Currently, prices have remained stable across condos, townhouses and detached houses in Greater Vancouver. According to Mark Ting, a financial analyst, “the main reason house prices are not currently dropping is due to government intervention” through government programs that is subsidizing or deferring payments for utility bills, property tax, income tax and mortgage payments. “All these programs have bought struggling homeowners some time, and have taken the pressure off to sell their homes.”
However, the unemployment levels are increasing. According to Moody's analytics, "for every one per cent increase in unemployment, house prices typically drop about 4 per cent. Based on this ratio, if our unemployment rate were to double from pre-COVID-19 levels, home values would drop by roughly 20 per cent."
As COVID passes or if these subsidy programs run out, I believe we will see many more listings on the market. At the same time, there are also many buyers (especially first time homebuyers) waiting on the sidelines once this passes.
What does this mean for buyers and sellers thinking of making a move in the real estate market right now? There are some great deals right now. There are homes just sitting vacant or have been sitting on the market for a while, waiting for a buyer to snatch it at a good deal. For sellers, consider that unemployment levels may continue to increase which may decrease the value of your home next week or next month.