Same with the previous two years, home sales had reached their peaks in May before leveling off in June (see graph below):
Home inventory continued to accumulate as home sales started to level off.
When we look at supply and demand with the Sales/Active Ratio graph below, we see the market had returned to the balanced market level in 2013-2014 before the boom started in 2015 when home inventory dropped to a all time low at the end of 2015.
It had been a very strong seller’s market for the past four years. Buyers didn’t have much selections to choose from and they had to act very quickly to secure any deals. Now in this balanced market, buyers can finally take the time to do the normal due diligence expected when buying a home such as doing inspections, having financing subjects, etc.
As for sellers, homes are still selling but the asking price has to reflect the current market. We look at comparable homes that had been sold in the past 30-days to determine the current market price of a home. The tax assessment only reflect the price of June 1st of last year.
According to Kim Spencer, the manager of the Real Estate Board of Greater Vancouver’s Professional Standards Department, he had seen the real estate market slowed down like this three times in his real estate career.
Real estate market is cyclic. It always has ups and downs both in the short-term and in the long-term. The sales numbers, home inventory, sales/active ratios, the price all go up and down.
But in the long run, home prices generally go up (graph below). Even when the price dips down, it never goes back to the price at the beginning. How we wish that we can go back in time and buy single family houses at $400,000! That’s why they say, don’t wait to buy real estate. Buy real estate and wait!