Topic: Vancouver’s real estate market remains hotter than ever.

For more insight we talk to Dane Eitel, Founder and Lead Analyst at Eitel Insights

Host: Lynda Steele, the Lynda Steele Show

Link to Interview: https://omny.fm/shows/steele-drex/the-incessantly-hot-real-estate-market-in-vancouve

Vancouver's real estate market remains hotter than ever. For more insight we talk to Dane Eitel, Founder and Lead Analyst at Eitel Insights

2020, the year of Covid-19 resulted in some eye popping data. Historical anomalies were common place. Real estate seasonality was replaced with varying degrees of lockdowns. 

Greater Vancouver property values were on divergent tracks through 2020. Detached property values are just 3% below their historical high ($1.830 May 2017). Conversely, Condo values are just 3% above their cycle lows ($643,471 June 2019). Main proponent to the contrasting trends… Inventory. 

Price volatility was apparent in both markets. The Greater Vancouver average home sold for $1.710 million in February, values dropped to $1.586 million in May and finished the year at $1.770 million. The December sales price implies the market has gained 11% from the May 2020 low. All in all home values have reclaimed much of their losses from the preceding two years and now sit just 3% below the historical market high of $1.830 million. 

The condo market average sales price had multiple swings as well. Condo’s were selling for $699,099 during March, values dropped to $661,739 during April. Values temporarily recovered from the losses and were able to achieve a $698,996 sales price during September. Ultimately the values dove lower and created the low of the year during November with prices down to $657,030. Values finished the year with an 12% loss compared to the historical high of $751,632 during January 2018.

Much was made about sale totals during 2020, the data was greatly effected by the spring market being pushed into summer and summer into fall. If demand was a driving force behind the price changes for 2020 you would expect the condo market to be out performing the detached market. 

The condo market yearly sales totals were only down 6% from their preceding 15 years of data. Conversely the detached yearly sales were down 15% over the same time period. 

The condo asset class was able to achieve 14,003 sales in 2020 down just 3% the 2005 - 2019 average of 14,471. Being able to achieve an average monthly sales total of 1,205 was impressive considering April was only able to achieve 508 condo sales. 

As stated the detached yearly sales totals fell over 15% from the historical average. 2005 - 2019 yearly average sales total was 12,748. 2020 was only able accomplish 10,832. That breaks down to roughly 160 less properties sold each month during 2020. 

So why did detached values go higher while condo values dropped? The sales totals implied demand was closer to historical norms in the condo asset class while the detached sales were off by a wide margin. 

The answer is simply available supply levels. 

The 2020 detached housing market experienced the lowest total yearly active listings (50,225)  the lowest monthly peak of available properties (4,823 September) and the lowest monthly low (2,762 December)All historical anomalies compared to the preceding 15 years of data. 

The historical lack of supply drove home values higher across Greater Vancouver. Inventory during April of both market was a low point given historical norms, due to the initial wave of lockdowns. From April until September the detached market inventory increased by a disappointing  20%. The condo market inventory increased by a dramatic 58% over the same period of time. 

The condo data on the other hand experienced the high level total yearly active listings (58,543), monthly peak (6,279 September), and higher low (4,124 December) All data points are higher than the preceding 5 years.

The massive divergence between the two inventory levels impacted how the supply demand metrics exemplified themselves throughout 2020. The historical low amount of detached inventory during 2020 of 50,225, created the illusion that 10,832 sales were herculean as opposed to the insignificant total it truly was. 

By achieving near average inventory levels of 58,542 active inventory the condo market supply was able to engulf the sales totals which were only down 3% from their 15 year historical average.

Should the Detached inventory return to historical norms during 2021, home values will likely decrease as the supply demand metrics begin to even out. However, if the detached inventory remains at abysmally low levels, the recent price increase could be sustained. The initial 6 months of 2021 will greatly impact serval years forward.

Inventory typically increase as home values rise. Owners prefer selling at market highs rather than lower price points. Throughout 2018 - 2019 when prices declined had declined as low as 20%. The current high home sale prices and low inventory has created an excellent opportunities for owners to sell at market highs with little to zero competition.

Again in contrast with the detached market, the condo market has many ripe opportunities for purchase. Downtown Vancouver have realized substantial losses. All four areas (Downtown, Coal Harbour, West End, Yaletown) which make up the Downtown core have all been down at least 25% from historical highs during 2020. These losses have created an ideal entry point especially for those looking to downsize from their detached home.

The desire for detached properties combined with low inventory levels have pushed home values up across Canada. The city of Toronto home values in December were $1,475,758 up 18% from the lows of the year (April $1,249,730). With the recent increase, the city of Toronto detached property values are just 6.5% below the historical highs of $1,541,003 achieved in April 2017. 

The exodus from condo’s for detached properties effected the city of Toronto greatly as well. Condo values achieved their historical highs during February 2020 of $722,675. Values rapidly dropped to finish the year down 13% from those highs and just 2% market cycle lows. 

For you individual market charts and analysis please contact Eitel Insights directly.

Link to Interview with Reporter Tyler Orton of BIV:

https://biv.com/video/making-sense-real-estate-market-2021

Making sense of the real estate market in 2021

The Metro Vancouver real estate market made a giant splash throughout 2020 despite all the economic uncertainty. But is this sustainable? Dane Eitel of Eitel Insights joins BIV Today to discuss how the market kept chugging along and what’s in store for the coming year. Reporter Tyler Orton hosts.

January 8, 2021 | 3:02 pm

Article Written By: Antonia Cundy

Link to Full Financial Times Article Article:

https://www.ft.com/content/341fd1ee-d9e4-474a-8b80-46a8b39ce105

Eitel Insights recent condo market update made it across the pond. A recent article covering the Vancouver Condo market features comments by Dane Eitel. See a few of the statements quoted in the article below.

How Covid-19 caused Vancouver’s Condo Conundrum

“It’s not normally like that, the condo and detached markets normally move in lockstep, but that demand to live in a detached house with a yard has meant they’ve taken completely divergent paths this year,” says Dane Eitel, founder of real-estate analytics company Eitel Insights.

This slide in prices is likely to increase further, Eitel says, as new-builds come to market in the next year. “I actually see the condo market inventory increasing because we’re seeing the completion of these buildings that people bought as investments years ago.

“What that ultimately leads to and has already led to downtown is a cannibalisation factor,” he says. “You see those older buildings have to reduce their prices quite aggressively to get a sale and then the newer ones have to reduce their prices too.”

“We have a large rental base here and now because of Covid there’s no need to work downtown. The exodus from the condo market has been real,” says Eitel Insights. “So now owner-investors have no rent covering their mortgage, so they’re either looking to get out or they’re looking to stem losses.” This slide in prices is likely to increase further, Eitel says, as new-builds come to market in the next year. “I actually see the condo market inventory increasing because we’re seeing the completion of these buildings that people bought as investments years ago.