VANCOUVER (NEWS 1130) – Don’t believe the hype. That’s a real estate tracker’s warning about claims home sales in Greater Vancouver are climbing up again.
Dane Eitel, the founder and lead analyst of Eitel Insights, says the market will get worse next year.
“We could see a very real day of reckoning here come 2020 to the detached market and that’s where we’re actually going to see some need-based selling, which we haven’t seen for many, many years, to the ’90s.”
November’s numbers from the Real Estate Board of Greater Vancouver show residential sales rose more than 55 per cent compared to a year ago, but Eitel says monthly detached home sales haven’t topped 950 since 2017.
“The realtors seem to want to forget that 2018 was historically bad, so just because this year isn’t historically bad doesn’t make it a positive. You know, we’re roughly averaging right around 12-hundred sales over the last 15 years.”
Eitel says, even though average sale prices have climbed roughly 30 per cent since the summer, “picking yourself up off the floor doesn’t mean you will win the fight.”
“The higher-priced properties are actually selling discounted. A lot more inventory will show up at the beginning of 2020. We will definitely see the foreclosure proceedings start.”
“Picking yourself up off the floor doesn’t mean you will win the fight.” @EitelInsights founder Dane Eitel predicts average #vanre condo prices fall to $525K within 2 years and detached home prices could drop below $1.4M in 2020, despite recent spike in November sales. @NEWS1130 pic.twitter.com/UME1YYMNLh
— Marcella Bernardo (@Bernardo1130) December 15, 2019
He adds the average price of a detached home in Vancouver is now $1.4-million.
“We’re still down seven per cent, roughly $120,000, so if 1.4 does not hold, the next threshold is 1.225.”
Eitel tells NEWS 1130 the situation won’t start improving until the end of 2021.
“However, it’s going to get worse before it gets better, so after the prices from 2015 went up $430,000, we’re anticipating to see all of that equity gained erased.”
He says it could take another year for condo prices to fall to an average price of $525,000.
“The condo market usually does lag the detached market by about a year, however, I would anticipate seeing it in 2021 that we start testing that 525-threshold. There will be a day of reckoning here upcoming over the next couple of years.”
The average sale price of a condo in November was $670,00.