When do sales usually slow?

Triple A Rated wrote in the comments: “At an open house last weekend a Realtor told me that he expected a lot more listings from May until around Mid July. He also expected Sales to slow.”

Is the realtor basing that on actual past market performance?  We looked at this a similar way back in the spring by taking the average conditions in the past 20 years, but only with inventory and MOI.

Here is our usual cycle when we mash together 20 years of real estate history.

So it seems the realtor was more or less correct.   Inventory increases from May but only for another month or so, while sales and new listings are expected to drop.  Months of inventory is typically lowest in March when sales rise and inventory hasn’t built up, with April and May close behind.

That might be a bit too heavy handed though.  Let’s just take a look at the hot market of 2002 to 2006.

Looks a little different now but still fundamentally similar seasonal patterns.   During our last hot market, the spring was relatively stronger than the fall, and inventory tended to be maintained at the more consistent level through the summer and fall. In any case, don’t expect a slowdown for the next 6 weeks at least.

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36 thoughts on “When do sales usually slow?

  1. I toured that cedar hill house (when it was listed in 2014, $458,888) – basement seemed kinda damp? Backyard looks into other backyards & the driveway lane is shared with neighbours. Somewhat open layout though!

  2. 2747 Asquith sold today for 778k, 90k above asking. It’s an attractive looking character house with what looks like a decent main floor, but only 2 beds, an awkward loft and a 1 bed low height suite down, so not super practical. To me this sale indicates there’s still some heat in the Oaklands area.

  3. I think Hawk is talking about 2941 Cedar Hill Rd. It’s amazing to me that they’re asking as high as they are. Only 2 beds and they’re in the basement? A parking lot for a backyard, terrible location near busy corner of cedar hill/ cook/ hillside intersections. Can’t think of a nice thing to say about this place. I’d take the updated bungalow for 750 on Asquith any day over this place.

  4. The layout of that house isn’t very well thought out. Only 2 bedrooms, and those bedrooms are in the basement, making it feel like you are living in a suite! A family expects at least 3 bedrooms in this price range.

  5. Wow, that is still a very high price for what it is. 600-650 was a pretty common price for a similar house this time last year.

  6. 918k for Eastdowne. Looks like they list priced it better for the current market but still 260k above assessed and needed lots of renos, eg, kitchen, no shower head in main bath

  7. Entomologist,
    Yes I noticed that afterwards. They are just now getting “concerned” about Toronto condos. What these reports seem to point out at how out of touch CMHC truly is with the real numbers.

    I guess 8 times income versus Vancouver’s 11 times is nothing to worry about when you dole out billions to those who have no business owning in the first place.

  8. Hawk – Winnipeg is also the same as Ottawa in the chart; also not considered ‘overvalued’.

    That’s a weird chart. Quebec and Halifax, both larger in population than greater Victoria, are not included for some reason.

  9. db,

    You mean that the government agency responsible to taxpayers that’s maxed out to the hilt can’t write an honest report ?

  10. Wow, is the CMHC ever out to lunch. Victoria and Ottawa only cities considered not overvalued though their charts don’t seem to make any sense over what VREB use and what Leo produces.

    They are only now adding Vancouver as overvalued. More signs the government is either totally clueless or up to their ass in major trouble.

    CMHC calls out nine real estate markets for growing signs of overvaluation

    http://business.financialpost.com/personal-finance/mortgages-real-estate/cmhc-calls-out-nine-real-estate-markets-for-growing-signs-of-overvaluation

    http://www.cmhc-schl.gc.ca/odpub/esub/68649/68649_2016_Q02.pdf?fr=1461781005540

  11. As for bidding wars for detached houses in the core:

    1st week of February had 46% of houses sell over asking price
    2nd week was 40%
    3rd week was 47%
    4th week was 63%

    First week of March 53% of houses sold over asking price
    2nd week of March 56%
    3rd week was 59%
    4th week was 63%

    In the first week of April, 59% of homes sold over asking price
    In the second week 56% sold over asking
    in the third week 52% sold over asking

    But we also need some kind of a base line for comparison to gauge what is normal. A year ago in the first four weeks of April, 21% of houses in the core sold over asking price.

    Now you be the judge of what this means.

  12. AG, yes that’s what we did but we sold our old place in July just because of way we had to organize the move. It was a time of increasing prices, though, so we felt OK about the wait. If the market had been more volatile we would have timed the purchase and move closer.

    It’s also hard to tell what’s going to happen this year with so many more bidding wars

  13. So the optimal strategy might be to buy a new house in Winter, then hold on your current house until the Spring market heats up?

  14. “I wonder though what you all think could happen to the real estate market in Victoria when this happens.”

    I think Victoria real estate prices would be hit too, similar to 34 years ago in the early 80s – due to a general economic downturn (it might be Chinese economy affecting the world, higher interest rates, more restrictions on lending). Eerily we see the same things now in Victoria as we saw in the 90s/00s in Vancouver – increase in dark SUVs roaming streets, more 8’s in list prices, more bid-over-ask, pushing prices higher.

    But there’s another kind of “crash” happening right now in Vancouver (which might lead to bigger economic problems) – it’s middle class families not being able to find affordable housing, abandoned sections of a once-thriving city, and loss of farmland.

    Described well here:
    http://www.moneysense.ca/spend/real-estate/4-more-casualties-of-vancouvers-real-estate-market/

    In answer to the question: “are there better priced, great properties available in fall/winter? ”

    Yes definitely. That’s when we bought our home – excellent house/location, the owners had to move out suddenly due to health issues, and it was a slow period when people were getting ready for Christmas and normal house-hunters had taken a break, but there were still several bids & we had the highest one, which was lower than similar houses in previous summer & following spring. (several years ago)

    We were monitoring properties all fall/winter, & many great ones came up for sale (I remember one that went for $575k in December, then in following spring similar one in same hood went for $725k, I still have the addresses) – people having to move for job or health reasons. Not as many as spring, but again, not as many buyers (because people don’t like looking for homes in winter darkness)

  15. I haven’t yet seen any evidence that a home will fetch a different price depending on the season. Although the idea that it is much easier to take attractive pictures in the spring makes logical sense. You know of anything Just Jack?

    My sense is that prices are a bit lower in the winter because it’s the dredges that are left over on the market so prices are lower but so is the condition of the housing stock, so there is no additional value there.

  16. When is the best time to list your house for sale?

    If you’re like me, then you would like to sell your home when it looks its best. Nice green lawns and flowers in full bloom. And that is usually in the spring.

    But that isn’t necessarily when you will get the best price for your property. Since others are thinking the same thing there should be more homes for sale.

    For some this may be the year to crystallize those paper profits on their rental investment properties. Turning that equity into dollars in a bank account, paying off other mortgages or enjoying the wealth effect at a swim up bar in the Yucatan.

  17. I wonder though what you all think could happen to the real estate market in Victoria when this happens.

    Hard to imagine a crash in Vancouver would not have some repercussions here. Of course Vancouver has been “ready to crash” for a while now

  18. I guess there’s some activity at the higher end of the market:

    3140 Tarn Place sold for $3m
    515 Foul Bay Rd sold for $2.61m
    3535 Upper Terrace Rd sold for $2.36

    .. all in the last few days.

  19. would have been cheaper for Victoria to buy all the docklands and resale to condo developers and build a bridge that does not lift. just a thought.

  20. Admirals took only a year for the same distance. It’s now going on 3 for Victoria and counting.

  21. Sometimes I think people in Victoria forget how big Greater Vancouver really is.

    Greater Vancouver builds a bridge that spans the Fraser River we haven’t been able to span a creek.

  22. AG,
    If the market tanks in Van do the banks say you can keep borrowing your ass off Victoria, because you’re special ? Banks don’t care about more hipsters and high risk techy start ups when the shit’s hitting the fan.

    We didn’t go up for the same reasons Jack mentioned. We’re not the financial center, and Asians don’t like island, and the ferry hassle, as well as the small Asian community. If they did, they would have been here decades ago.

  23. Just Jack – if they’re so strongly connected, why hasn’t Victoria seen a huge rally in prices over the past 7 years like Vancouver?

    The reality is that they are separate markets. Sure, Victoria is influenced by Vancouver, but there is a lot more going on.

  24. Vancouver is the financial center of BC.

    It’s the elephant and we are the mouse sleeping beside it. The mouse rolls over and the elephant feels nothing. The elephant rolls over and the mouse is crushed.

  25. @ Rook

    If/when Vancouver crashes there will undoubtedly be a psychological impact on buyers in Victoria. However, there are definitely a few reasons, IMO, that Victoria might be quite well protected.

    A) Victoria hasn’t seen any kind of bubble yet. Prices flatlined in nominal terms, and declined by at least 20% in real terms, before the recent rally. Houses are still quite affordable.

    B) YVR prices are so crazy now that even a 40% drop won’t make them affordable. Families who can move will still be incentivized to leave and come to Victoria.

    C) The growth of tech jobs and work-from-home opportunities.

    D) Retirees coming from Alberta and other parts of Canada.

  26. I was checking out the new website for the development going into the metchosin quarry… does anyone know when phase 1 is set to be complete, or the estimated price on these homes? The face designs look good, still awaiting floor plans. http://gablecrafthomes.ca/royalbay/

  27. Most would not deny an eventual crash or melting of the unsustainable and irrational Vancouver real estate market. The timing is the hard part to predict. I wonder though what you all think could happen to the real estate market in Victoria when this happens.

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