Week 36-37/52 2020
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September 18, 2020
The number of confirmed cases of the COVID19 in the past two weeks has risen again. As the new school year begins, the number of confirmed cases has continued to rise. It is a fact that the current government is doing its best to control the infection to the smallest extent. https://www.theglobeandmail.com/canada/article-coronavirus-cases-canada-world-map-explainer/, as you can see from the link, The numbers have remained at a very low level from mid-May to early August, but since mid-August until now, they have been showing an upward trend, and there is almost no sign of slowing down at this moment. Although the current spread ratio is still 1:1, we are here still appeal to everyone: protect yourself and avoid crowded places. We hope that BC and the whole Canada can withstand the second wave of the epidemic.
Next, lets take a look at the market:
Surrey, White Rock, Langley
141 properties were recorded sold this week, with an average sold price of 1.27 million and a median of 1.16 million. In the last two months, regardless of the volume of transactions, the average price and median price in these three cities have changed very little, and they are all within the reasonable range as expected. It shows that the price expectations recognized by buyers and sellers in the market are getting closer and closer, and it doesn’t seem to be directly related to changes in the market’s external environment, such as the COVID 19, political reason, and the uncertainty of the global economy, which have not affected too much of Metro Vancouver. Real estate, on the residential aspect, as long as the listing price follows true market value, it would get sold very fast.
South Surrey and White Rock sold 30 single detached this week, with an average price of 1.66 million and a median of 1.42 million (the average sold properties in the past two weeks was about 30, and the average price was also around 1.6 million, with the median maintained at about 1.38 million ). The reasonable assessment of 7,000 square feet land in Ocean Park, Elgin, and Sunnyside of South Surrey is between 1 million and 1.1 million, and 8,000 square feet land is about 1.1 to 1.2 million. The average value of 6,000 square feet of land should be around $900,000, all prices here are for reference only.
Don't be afraid of too much about the market trend in the next three months this year. In fact, the situation for the whole year is already clear, which is consistent with the steady increase in volume and price remaining same as we predicted in the beginning of the year. The price will not fall or raise in the next three months. The volume will fall because of the traditional off-season, but the price will not fall as the volume falls. At most, it will only be a technical adjustment. From now on, the market will continue to wait and see before the peak season begins in 2021, and then set the trend for the whole year. We have also said before that the particularity of the real estate market in Metro Vancouver will only have two results: an ordinary rise and an excessively rapid rise. Based on the fact that we do not see that more new cash will enter the Metro Vancouver market in the next 2-3 years, Therefore, we maintain our forecast for a moderate increase in land next year. It may be a little earlier to say this now, but the particularity of Metro Vancouver gives us plenty of reasons to believe in the accuracy of our forecast.
Vancouver WEST & EAST
102 properties were sold in the past two weeks, with an average price of 2.61 million and a median of 1.87 million. The average price has been increased because the SHAUGHNESSY area has always had sold properties with price more than 10 million in the recent period. The most recent one occurred last week with a sold price of 23 million, so this single sold will increase the average sold price in this area. But the median price is 1.87 million, which is still within a reasonable and safe level. Therefore, it is a good thing to have a high sold price because It shows that the market is confident and funded. But in fact, if it extends to the entire city of Vancouver, the market transaction is still relatively mild. The median is around 1.9 million, which is a very healthy number.
3273 W 11TH AVENUE, is a typical 4,000-square-foot lot in VW area, with an old house on sold for 2.38 million. According to our assessment reference, the land value is around 2.2 million, and the renovated old house is given a price of $200,000, so the sold price is very reasonable. The Vancouver detached house market is definitely the core area of the detached house market in Metro Vancouver. Even if there is a shortage of new money in the market, it is still the most watched and concentrated area by potential buyers. We have observed the transactions in the last 2 months, and we don't see any signs of weakening of the market outlook. Whether from the market’s accumulated funds or new funds being entered into the market, there should not be a risk of stabilizing.
The sold single detached in the past 2 weeks was 57, with an average price of 1.76 million and a median of 1.55 million. We have mentioned several times this year that the median safety line for Richmond this year should be 1.5 million. Although it fluctuates in a big range sometimes, the median rushes to 1.8 million, and it falls near to 1.4 million, but we think the safe median price under the current market should be around 1.5 million. For example, it has always been emphasized that the ceiling price of 7,000 sqft land does not exceed 1.4 million, and the estimated value of new houses on a 7,000 sqft land is between 2.4 million and 2.5 million. These prices are very competitive in the market, but if they are listed too high, the time for sale in the market will be very long, so only reasonable price that reflects the true market value will be considered.
In the past two weeks, the sold single detached was 53, with an average price of 1.74 million and a median of 1.54 million. Richmond and Burnaby belong to the high price area, with no massive new money coming to local area, weekly trading volume has not been high since this year. On average, it is about 20 properties sold every week. However, there are quite a lot of listings in these two areas. For example, Richmond currently has 577 single detached listings, but only 20 are sold per week, with a weekly listing-to-sale ratio of 29:1 (monthly listing-to-sales ratio 7:1) . And Burnaby City currently has 336 listed, and the weekly price-to-sale ratio is about 16:1 (monthly price-to-sale ratio is 4:1). This is the typical feature of high price areas. There are many high-priced listings, which are generally higher than the main buying power of the market. There are occasional high-priced sold properties but they have no effect on the market trending. These listings will either drop prices and follow the market, or wait for the market to rise again. However, given that the prospect of new funds entering the market is uncertain and not optimistic, we may see more and more listings that are traded with real market value.
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