There’s more good news for the housing market in Vancouver for the third quarter. Even as economic, political, and environmental uncertainty remains, not to mention COVID-19 variants, the housing market continues its historic hot streak. Low interest rates are one of the main drivers of this as it has prompted a flood of house hunters into the market in search of homes.
Unlike many other places in the country, however, this hasn’t led to a housing shortage yet. In fact, there has been an increase in the number of housing units on the market over the second quarter of this year. When both supply and demand are up, that’s good for everyone. How long that will last is anyone’s guess, however, but there is no immediate danger of a house market crash and interest rates will likely stay low until at least late next year.
Read on for some key numbers on the Vancouver real estate market for the third quarter. You’ll find that for first-time homebuyers this is a great time to look for your dream home. For others looking to downsize to a smaller space or upgrade to a larger one, it’s also a good time to start shopping for your next home. And for sellers who are getting well over the asking price in many cases, it’s also a prime time to get into the market in Vancouver.
Median Sold Price
The housing market in Vancouver, Washington continues to impress. When we look at the median sold price for the third quarter of this year, we see an increase over the same time last year of close to 15 percent— $476,000 compared to the $415,000 from 2020. Even looking at the second quarter numbers from this year shows an increase of nearly three percent.
It’s good to look at the median sold price as opposed to the average sales price which can skew the numbers. The median price marks the middle of the column with lower numbers below and higher numbers above. The average number, on the other hand, includes both the lowest and highest sales numbers. When these outliers are excluded from the equation, we get a much more accurate picture of the real numbers.
Number of Homes Sold
Looking at the number of homes sold for this quarter of 2021, we see 2,962 units sold. We see an increase over the third quarter of last year of just over two and a half percent. Compare that to the second-quarter numbers of this year and it’s about a six percent increase. Unlike many areas of the country, more homes are being sold and at higher sales prices. This means that, at least for now, there’s no danger of a housing shortage. Supply is meeting demand but increased demand is forcing prices higher.
Median Days on Market
More homes for sale and at higher sales prices are ideal, of course, but there’s another number that is encouraging as well, and that is the Days on Market numbers. In the third quarter of this year, the number of days on the market is five. That’s a fifty percent drop from the third quarter of 2020 and just a slight increase from the 4 DOM of the second quarter of this year. DOM is the total number of days the house is on the market which includes the day the housing unit is listed until it is sold. A shorter time on the market means that demand is high and, with increased sales on those homes, it means buyers are willing to pay over the asking price to secure a deal.
As we mentioned previously, the low interest rates currently available on mortgages are driving many into the market. At the time of this writing, the average mortgage rate on a 30-year fixed-rate mortgage is a hair over three percent while a 20-year fixed-rate mortgage sits at 2.633 percent. For a 15-year mortgage, the rate is 2.115 percent with 2.052 percent available on a 10-year fixed-rate loan.
The ongoing pandemic is the main reason interest rates have remained so low. It’s forced many in the Vancouver area to rethinking their live/work situations. Locking in a low mortgage on a bigger space, or a smaller space, is a good move. While it’s not easy to predict when the Federal Reserve will raise rates, it’s not expected until at least 2022.
Key Takeaway from the Q3 Numbers
The main takeaway from the third quarter numbers is that the hot streak continues to the benefit of both buyers and sellers in Vancouver, Washington. The future is uncertain as the Delta variant of COVID-19 is still impacting the country and interest rates won’t remain so long forever.
Another factor that may affect some buyers from getting into the real estate market right now is a fear of a housing market crash. 2008 what not that long ago and many people remember the devastating effects of that crash. The big difference between 2021 and 2008, however, is that the demand for housing today is real and it’s a natural result of low interest rates and the shutdown forced by a global pandemic. Twelve years ago, the demand was artificial and the resulting bubble burst resulted in a wave of foreclosures.
Again, there’s no guarantee that interest rates won’t rise sooner than expected and there’s no promise that a housing shortage won’t result from such high demand. In fact, these are both good reasons to act now before the market cools down. If supply does fail to meet demand, however, this presents an opportunity for real estate investors and developers to create new housing to meet that demand. How feasible that is while the pandemic continues to impact the economy is difficult to gauge, but in that instance, buyers will need patience until housing stock is replenished.
The data cited in this market update was sourced from multiple places. It’s subject to change over time and is only intended as a snapshot of the Vancouver, Washington real estate market in September 2021.