The August numbers continue to slide. The August sales were 36.6% lower then last August and 25.2% below the 10-year August average.
The sales-to-active listing ratio are lower across all categories. 9.2% for detached homes, 19.4% for townhomes and 26.6% for apartments. While generally speaking, a ratio below 12% for sustained periods will put downward pressure on price, the benchmark prices across all three housing categories have declined for two consecutive months! Apartments never dropped below 20% but their prices have gone down as well. Since May detached houses have dropped 2.8%, attached properties have dropped 0.8% and apartments have dropped 1.6%.
The big question is “Have we hit the bottom?”. While some suggest more price deterioration, the BC Real Estate Association says that based on seasonally adjusted data, the real estate market has already hit bottom and is moving up. It is hard to confirm yet, but comparing the sales-to-listing ratios for the first two weeks of August to the last two weeks of August, in general, the ratio stayed the same or incrementally better. Also the total number of listed homes have dropped 2.6%. So, it is possible, but we’ll need to see the September data to confirm this.
Meanwhile the Bank of Canada held their overnight rate steady in the September meeting. Most believe there will be one more rate hike this year. And once NAFTA is settled, then the Bank of Canada will be free more comfortable raising interest rate again. Many believe this means the next hike will be at the next meeting on October 24th. While another 0.25% might take out a few more first-time home buyers, I think the bigger negative impact to the market will be more psychological.
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