Rates Continue to Drive Market

Interest rates have continued to stay stable and low. This is one of the biggest market forces in real estate and it is getting buyers off the fence and into homes. Despite the slowdown in the rate of appreciation, the volume continues to impress with the number of monthly closings now pushing up into the pre-crash figures.

Overall the local median price has stabilized and I believe this is more about the imbalance of market segments than a real pricing contraction. Most of the activity in the market is in the bottom half of the price range. This heavy weight towards lower priced units definitely effects the median price. That does not mean that an upper price range house has lost value, but rather that it will take longer to sell.

Sellers are well advised to be careful with price, the days of overpricing a house and expecting a swarm of hungry buyers is past. These days, well priced homes will move and overpriced homes will sit. We have a slight glut at the top right now and remain tight on sub-median inventory.

The Downtown urban condo scene is doing pretty well, I monitor Vancouver USA urban condos very closely on my site Urban Living in the 'Couv' and inventory is tighter now than it was over the summer. That bodes well for Vancouver's emerging urban scene.

Buyers should feel very good about the current interest rates and the slight softening on appreciation as they can feel confident that houses are generally well priced at the moment with fewer overpriced properties and the best rates we have seen in a long time.

Urban condos see a spike in listings, will the sales follow?

I published this article on Urban Living in the 'Couv' Monday. Urban condos are a big part of my real estate marketing efforts and as such I take a special notice to market 'wind shifts'. I figured I be well to inform the readers here of what's happening Downtown.

Originally published in Urban Living in the 'Couv', July 8th, 2019, by Rod Sager 

There is no shortage of units in Vancouver's urban condo market. New ones come active each week but nearly as many go pending or close as well. This is good activity. The days on market is dragging just a bit, but it seems sellers are starting out high on price and coming back to the market over a few months. Sellers pricing the units well from the start are seeing a quick sale.

You can see a spike in listings for June that outpaced the spike in closings. I'll be watching to see if the local market can absorb these new units in a reasonable time period. I think the listing spike likely came after sellers on the fence saw good activity in the spring and decided now is the time to sell. Summertime in Downtown is a lot more exciting than winter as the festivals, concerts and other fun stuff like the Farmer's Market is a big draw. The figures above are for condos in Downtown only so this does not include areas like Columbia Shores, Tidewater, or Shorewood.

The $500,000 to $750,000 price range is the only range that seems under-represented in terms of available inventory. Recent units in Viewpoint and Frontier in that range sold relatively fast and new inventory has not filled the void. Above $750,000 has ample inventory as does the entry level units like those found at the Academy Square and Parkview projects.

The waterfront project continues to build new developments, but the only condo project actually under construction is Kirkland Tower and those will be very high-end units mostly well above $1 million. Another proposed condo building is slated for Block 16, that is also right along the water so I am presuming those will be upper end units as well. That building however is proposed to have double the number of units as Kirkland so they may be priced in a lower range, yet likely still in the $750,000 plus market. That is just my best guess there is no real published data on the Block 16 project. The other residential projects going in are all apartments thus far.

The lack of actual condos on the waterfront could certainly be helping the condo market downtown as the area continues to see economic expansion and significant improvements to enhance the living experience. The success of the various apartment buildings such as Rediviva and Riverwest, both complete and available now, could spark developers to roll the dice on condo projects along the new waterfront. These two apartment projects feature units with rents from $1,800 to $4,000 per month and there are a total of 280 units. Income required to support $3,000-$4,000 in rent is good enough to support a condo well above $500,000.

I believe the condo projects proposed and planned for the waterfront are taking a wait and see stance to monitor the success at Rediviva and Riverwest before committing to expensive condo projects.
The City of Vancouver and Gramor need to focus on bringing some high paying employers into the downtown, waterfront, and Port of Vancouver to help support more residential development, while the economy is still strong. Jobs are very important and there are plenty of companies looking to expand in and/or into our region. The waterfront project will be easy to fill with people should we add another 5,000 good paying jobs close in. Nobody save for the occasional traffic masochist, likes crossing the bridges to work.

Things are solid on the Vancouver Urban Living scene.

Urban Condos and Appraisal

Urban condos have some unique qualities that can make one identical unit in the same building have a broad range of price discrepancy. Now differences in similar units are certainly not exclusive to urban condos; homes on corner lots, homes with a view, backing to open space, etc can all add or detract for the market value. But urban condos add additional dynamic and not all appraisers are in the "know". Simple concepts like interior facing units versus exterior facing units might seem simple enough, but does the appraiser know that one is exterior and the other is interior. Maybe, maybe not. Appraisers do not go inside the comps they use, rather relying on data from the local MLS and tax records.

It is important that Realtors® make these differences clear when listing a unit with favorable conditions. There are other items that carry some weight in suburban housing but much more importance in an urban setting. Walk scores are used by a variety of websites to determine how well a property fares when the resident is walking rather than driving. In suburbia this is not as pressing as most suburbanites expect to do a fair bit of driving to get things done. But in an urban condo people often choose to either not own a car of share a car between them. Walkable scores and easy access to public transit are critical. Realtors® should not assume that appraisers get these dynamics. Putting that info in the remarks, which most appraisers WILL read can help that appraiser understand why a buyer offered X for a unit that "seems" similar to another that sold for Y.

Different buildings may be very close to one another yet have dramatically different prices and quality levels. In suburban developments neighborhoods vary wildly in quality and desirability. In urban areas the "neighborhood" can be as small as a single block. In a secure urban building you can have units selling for seven figures because the building has super high end facilities and the units are up high with great views and a building literally right next door has similar sized units for 1/3 the price. It's all good in the neighborhood 'downtown'.

Locally Vancouver USA is rising up with a lot of mid-rise and high rise development going in downtown and along the new waterfront. It's a very exciting time, but we Realtors® still have to stay sharp and frosty and be sure to help both the buying public and appraisers understand the intrinsic value proposition of their listed units ;)