Richmon dHousing Market Update - May, 2020
Total home sales in Richmond for May, 2020 totaled 151 units were 44% below the total sales of 268 units the same time a year ago. This is a huge reduction in the number of homes sold for the month due to extremely low buying interest from home buyers.
The MLS® HPI Benchmark Prices for the 3 housing types managed to stay above their respective benchmark prices a year ago. The major Canadian bank's mortgage deferrment program undoubtedly provided the support needed by over-leveraged home owners who would otherwise be prompted to take action to arrest the deterioration in their finances.
Sales To Active Listings Ratio (SAR)
Following the COVID-19 lock-down and social distancing since March, 2020 the SAR which is an indicator for market sentiment took a dive in April and in May, the ratios remained quite bearish. Both detached houses and condos remained in Buyer Market, while townhouses managed to hang on in the Balanced Market
Forecast For Next 6 Months
The financial impact caused by COVID-19 is expeced to be long lasting due to the pandemic having a huge impact on employment, immigration, the hospitality business and slumping oil prices due to the contractions in the world economy. The financial hardships suffered by over-leveraged home owners and real estate investors will likely result in more sellers putting their homes for sale in the later part of 2020 and through 2021.
The 'need-to-sell' home sellers are likely to overwhelme the 'need-to-buy' home buyers. Home buyers are constrained and many will prefer to wait for the COVID-19 pandemic situation to become clearer. Some of the factors limiting home buyers getting back into the market are:
- Mortgage financing is still a major hurdle for many home buyers;
- Home prices are still very unaffordable for most home buyers;
- The pandemic has resulted in many potential home buyers holding off their home buying plan;
- Price drop as predicted by CMHC and the media cautioning buyers not to rush buying their homes.
Vancouver Realtor, Steve Saretsky when interviewed by Bloomberg provided his thoughts on the market outlook for the Vancouver Real Estate market.
If you are planning to buy or sell your home, or interested to find out the current market condition, kindly contact us at 604-721-4817 or email us.