Real estate slowdown could bring more certainty to B.C. market, experts say
Housing sales across the Lower Mainland decreased in April for the 2nd month in a row
As housing sales across the Lower Mainland declined in April for the second straight month, some experts say the slowdown could bring more stability to the market.
The Real Estate Board of Greater Vancouver reported home sales dropped 25 per cent from the month before. The decrease is quite pronounced in the Fraser Valley, where home sales dropped 36.6 per cent from March to April.
Adil Dinani, who is a realtor in Metro Vancouver with Royal LePage West, said the slowdown is healthy after the red-hot market of 2021.
"We're going from an overheated market to what I would argue is now more of a balanced, normalized market environment."
For the past two years, homes in the Lower Mainland have been selling quickly and well above the asking price with multiple offers on the table, according to Dinani.
Dinani is now spending more time educating sellers on the shifting market and ensuring homes are priced accordingly.
"We were in a marketplace 12 months ago that was uncomfortable for us as practitioners, was uncomfortable for purchasers and was somewhat uncertain for sellers."
The slowdown is seen across the province, with the British Columbia Real Estate Association reporting house sales in the province dropping 24.1 per cent in March 2022 compared to March 2021.
Dinani said the dip in sales presents a good opportunity for buyers, who have been dealing with a fiercely competitive market for the past few years.
"Frustrating and disillusioning"
After a three-year-long search, Port Alberni resident Michael Huber and his wife are in the final stages of buying their first home.
Huber said the process of looking for a home was "very frustrating and disillusioning."
Huber and his wife, who are expecting their first child in the coming weeks, said affordability was part of the reason they decided to move to Port Alberni.
"I'm 42 years old and I've been saving up for a long time. I didn't know that I would actually have the opportunity one day, given the real estate market," said Huber.
In their search, they encountered many homes with structural damage or homes that required up to $100,000 in necessary repairs to make the house liveable.
Huber said buyers were snatching up these homes and even fighting over them, with bids well over the asking price.
"I felt like I was being cheated."
Huber said to get their home, they skipped a home inspection because they knew their offer would not have been accepted. They paid $51,000 over the asking price.
"We just did our very best at getting educated in what seems like a good enough deal and what isn't going to crumble below our feet," said Huber.
Increasing interest rates
Andrey Pavlov, a finance professor at Simon Fraser University, said the slowdown in housing sales is a step toward stability.
"It's a very difficult market for both buyers and sellers. It's stressful, and no one likes that. And it's clearly not sustainable."
However, Pavlov does not consider the current market a buyer's market,
"This is a more normal market that can satisfy both buyers and sellers."
Pavlov said the recent dip in sales is driven by the Bank of Canada increasing interest rates to curb inflation.
Pavlov advised buyers to prioritize finding a place that they will be able to live in for several years to benefit from the long-term increase in value.
"Make sure you buy a place that you like and can stay for a long time and a place that you can reasonably manage financially."
With files from Lien Yeung