Many, if not most, markets were struggling to keep up with the rising demand of buyers in the past few quarters, and Vancouver’s housing market was no different. However, after analyzing the sales data from Q2, we saw an inception of new trends that are introducing a rapid market shift while housing inventory continues to run low.
Contrary to some predictions, the real estate market got much busier in the post pandemic era due to low interest rates. We saw many buyers take advantage of low interest rates while sellers were fielding bids much higher than the asking price due to low inventory. The repercussions of the pandemic on our economy will be far-reaching, but numbers from Q2 are showing signs of a returning stability in the market.
The inventory is expected to grow this year which should open up new options for many would-be homebuyers, so we should see the market stabilize further in the coming months. A rise in interest rates will introduce a considerable shift in the market and home prices are likely to go up with it. This will eventually break the momentum of the seller’s market and we can expect the days on market to go up slightly in the coming months. To get a deeper insight into Vancouver’s housing market, let’s take a look at some statistics.
The Median Sold Price
The median sold price for Vancouver’s housing market was $560,000 in Q2 of 2022, up 2.7 percent from last quarter and 14.2 percent in comparison to the same time last year. As the inventory continues to run low, buyers are not wasting much time in snatching up houses. We are expecting another hike in interest rates in the coming months, so we should see the market move towards a more stable point as home prices will likely go up and demand will start to wane.
It’s important to remember that median sold price is not the same as average sold price. Median sold price represents a halfway point in pricing between high and low numbers. It provides a much detailed picture of the actual sales price as it removes the outliers of the highest and the lowest sales prices.
Number of Homes Sold
With high demand and low inventory comes increased competition but it also results in quick sales as buyers tend to make bids much higher than the asking price. This is exactly what we saw in Vancouver’s housing market in Q2 of 2022, where the total number of homes sold was 2,079. That is 24.7 percent higher than last quarter which saw 1,667 houses being sold.
However, when compared to Q2 of last year, we are looking at a drop in numbers. This is a clear indication that buyers were quick to act in Q2 even with rising prices, but that is already starting to change as higher interest rates are pricing some would-be buyers out of the market.
Median Days on Market
The median number of days on market for Q2 of 2022 remains the same as last quarter, which is five days. This is another signal that despite low inventory, buyers were quick to get into contracts if they came across a good offer. When compared to the same time last year, we are looking at only one extra day. The demand for houses in Vancouver is alive and well— but will likely go down as we move farther into Q3, which is traditionally a hot time for both buying and selling homes.
The Current Mortgage Rates
The Covid pandemic has had devastating repercussions for businesses and communities around the nation and if the feds hadn’t stepped in to stop an incoming collapse, things could’ve been much worse. One of the good things that came of this chaos was that many people who otherwise were not planning on investing in the housing market anytime soon, got a window of opportunity to secure homes at lowered interest rates. That said, there have been some changes early in 2022, and experts predict that we are experiencing a rapid market shift.
The average rate for a 15-year fixed mortgage was 4.703 percent and 5.669 percent for a 30-year fixed mortgage, in Q2 of 2022. That’s an 11 percent increase when compared to Q1 numbers. Historically speaking, the mortgage rates are still low in comparison to pre pandemic statistics but that is expected to change soon as the interest rates and home prices are going up fast. We are already seeing some sellers go lower than their initial asking price as many buyers tapped out of the housing market in Q2.
The Overall Future of the Market
Q2 of 2022 has given us many signs that the market is indeed returning to a stable point. Although the inventory still struggles to keep up with buyer demand, the fear of interest rates going up further has driven many buyers to act fast and find a suitable home before it’s too late. While there are many factors affecting the housing market right now, the most significant change will be brought upon by feds if they decide to increase interest rates in Q3.
In other words, the housing market in Vancouver, Washington is not favoring sellers anymore as it did in the last year. The reason we are looking at more homes being sold is partly due to the fact that new construction is still struggling to catch up with the demand. This has created fierce competition in the housing market and existing buyers are not hesitating to go way above the asking price.
I must say, going forward, buyers must make themselves familiar with what a winning offer looks like. Regardless of whether you are selling or buying, talk to your agent about what your best options are. First-time home buyers may feel the pressure from the housing-crunch but if they continue to be patient, they can lean on their savings to close a good offer. We can expect home prices to rise in the future which might price some would-be home owners out of the market, but as the economy recovers, stability will eventually find its footing in the housing market. All in all, the housing market in Vancouver is looking good and growing strong in 2022.