2018's Real Estate market has seen the biggest dip in annual sales volume in the last 18 years. December sales were down 43.3% below the 10-year December sales average. Some people are even comparing it to 1998’s troubled market, although I feel it’s going to get worse. All through the holidays people have asked me what is going on with the market and what should they do? I’ve broken down my predictions based on attached condos/townhomes and detached houses.

Condos/Townhome (Attached) Market:
The condo market was six months behind the housing market’s drop. We started to see a slow down back in June, and really noticed pricing and sales volume drop mid-October. I can easily say prices have come down 10% on average in the Lower Mainland in the past 6 months. In some areas, especially higher end, even more. Recently when prices have dipped, we would quickly see investors snap up the deals. With the new lending rules, the investors have not been able to take advantage of the market and the prices will have to drop even more. Prices will stabilize once affordability is brought back into the market. When someone can buy a condo with 25% down and their mortgage and expenses will be roughly the same as rent. 
 
For Buyers-
The best time to buy in 2019 will be February, March, April, and May while prices are still correcting. Your strategy should be to have options. If you want a deal, now is the time to make low offers. If the seller doesn’t accept, move on to the next one. You will get a deal by doing this.
 
For Sellers-
The best time to sell in 2019 is either immediately before prices go down an additional 10% (or more), or hold off for two years. When selling in a down market, you need to be priced below the last sale. Believe it or not, there are still multiple offers on well-priced homes.
 
 
Houses (Detached) Market:
I first noticed the housing market being affected on Vancouver’s Westside in January. I’ve personally sold houses at 40% less than what they would have sold for a year prior. The big factor in this market is that it’s been very hard for people from China to bring money in. The increase in the foreign buyers tax to 20% coupled with the increase in Property Transfer tax to 5% on homes $3000,000 and above in February further eroded the market. Mortgage rule changes and rising interest rates have effected this market as well. The Eastside market started falling at the end of April, and slowly worked its way out to the suburbs. Reason being, people selling their homes on the Westside and moving east or out to the suburbs may have put their plans on hold, compounded with the mortgage rules.
 
For Buyers-
Whether you are buying a house anywhere in the lower mainland, there’s already been some big discounts. The housing market will stabilize before the condo market. I expect to see a 10% decrease in prices. Buyers should be looking at houses in areas of redevelopment. Land has had the biggest hit, and therefore is the best buy. Buy now and you will see great returns within the next two years.

For Sellers-
Sellers still have to sharpen their pencil on pricing. Be prepared to price your home lower than the competition, we still have six months of a falling market. If you want to put off selling, you will have to wait two years until prices start to recover.
 

The good news is interest rates will most likely not be going up. There are factors like a struggling economy and low oil prices. We may even see interest rates go down in the States based on bond yields dipping. Traditionally whenever bond yields go down, interest rates follow. By June/July the market will stabilize. By that time it will have been an 18 month cycle. This doesn’t mean prices will be going up, but they will stabilize and buyers will start to see value. From July on it will be a balanced market.

Supply across the board will be down. The fall market will have buyers looking for inventory and may start to see prices go up as the demand increases and supply remains relatively low. Going into 2020, prices will be on the rise for the Spring market, though I think we will see single digit increases as opposed to the double digit increases.

Mark Hammer PREC*
RE/MAX Crest Realty
Direct: 604-761-1335