As we saw in an earlier post, seasonality can play a strong role in influencing market conditions. Aside from seasonal patterns, a slew of other factors also can have a bearing on market activity, and by extension, how much of a premium you might be able to sell your home for:

1. Interest rates. While interest rates are currently sitting at historic lows, there is no guarantee that this trend will continue indefinitely. The Bank of Canada has suggested that rates will likely rise in the coming year. If and when that prophecy comes to fruition, consumer affordability will drop, leading to an overall cooling of the real estate market. Selling a home while interests rates are low and buyer demand is high maximizes your chances for a sale at top dollar.

2. Immigration and demographic shifts. Given the relatively low birth rates in Canada, it’s no surprise that much of our demand for real estate is driven by immigration. Sudden upswings in immigration (e.g., in the years leading up to the Hong Kong handover to China in 1997) have historically had profound impacts on our local market. Here at home, it’s postulated that changing population demographics (e.g., as the Baby Boomers age and downsize to smaller and smaller residences), there might be more pressure put on certain facets of the market (e.g., a shift away from single-family homes to townhome/condo living).

3. The economy. When national economic sentiment is positive, the local real estate market tends to fair well, as consumer confidence is generally high at these times. Due to higher “international” involvement in our local real estate market, increasingly economic forecasts from other nations—most notably the United States and China—seems to have an influence on consumer attitudes.

4. Government policy. Temporary tax credits, grants, and deductions are all tools at the government’s disposal for shoring up real estate demand in the short-term. Knowledge about the timing of these programs can potentially save a home seller thousands of dollars.

In conclusion it’s important to note that while trying to time the market looks simple on paper, in practice it’s rarely easily to achieve. The housing market is constantly adjusting and readjusting itself based on buyer demand and seller supply, as influenced by the principal factors listed above. As such, even the most carefully timed home purchase don’t always work out for the best.

When selling a home and making a subsequent repurchase, it’s important to keep in mind that unless you’re willing to sit by the sidelines and speculate, you will be purchasing in much the same market that you likely sold in. As a result, in particular in these cases, trying to time a sale to maximize cash in hand can sometimes be all for naught. As such, most real estate advisors will recommend that when the time feels right to you to go for the plunge. Who knows what surprises tomorrow might hold!

If you have questions about the market or would like to discuss anything mentioned in this article, feel free to send me an email or drop me a line—I’d love to chat. I’m a Vancouver Realtor who is an expert in residential real estate and sell extensively condominiums, townhomes and detached homes.

Many phenomena are reported to have seasonal variation. From tidal currents to consumer spending, seasonality is a well-documented phenomenon.

In the context of Vancouver’s real estate market the question “is there a best time to buy?” is often raised. While timing the real estate market with laser precision is virtually impossible–due in large part to the sheer volume of factors underpinning market growth and consumer behaviour—there are still certain seasonal trends that can be surmised:

WINTER. It’s no surprise that days are short and the weather is typically bad in Vancouver during the winter months. This is a time when many folks prefer to hibernate or temporarily relocate to warmer climates on holiday. As such, both prospective home buyers and sellers tend to shy away from the market from the months of November to February. In particular, the second half of December is a time of year where very, very few buyers actively search for homes. It’s reasonable to conclude that if a seller has their home listed for sale over the winter holidays, they are likely reasonably motivated to sell!

SPRING. From a historical standpoint, springtime is by far the most active time of the year for Vancouver real estate sales across houses, condominiums and townhomes. With the increase in daylight hours to view homes, purchasers have more hours at their disposal to sleuth for a new home. By March many of us have settled up our credit cards from winter travel and holiday spending, putting us in a more stable financial position to go out and entertain making a major purchase.

SUMMER. While traditionally the summer holidays have been regarded as a time of slow-down in activity within our local real estate market, this appears to no longer be the case. Since the turn of the millennium, sales activity in the summer months has more often than not mirrored activity levels set in the spring. On average over the last 15 years, sales activity within the summer months has been 35% more than in the decade that preceded that. While summer real estate market activity is Vancouver has grown in strength in recent years, it still pales in comparison to the spring and fall months.

July Home Sales - Greater VancouverThis figure shows the number of home sales in July since 1990. You can see here that the volume of home sales in July is generally higher this decade than we saw during the 1990’s.

 

 

 

FALL. Even today, the fall is still second only to spring in terms of consumer activity. While price appreciation is less common towards the end of the calendar year, that doesn’t seem to stop prospective home purchasers from hitting the pavement. With the return of children to school and adults to a routine schedule, many view it as a perfect time to begin searching for a new home and setting down roots for the new year.

While there are definitely seasonal patterns to how the Vancouver real estate market operates, no two years are ever identical and there are always a variety of forces at play underpinning these broader trends. Every home purchaser and seller has their own unique objectives and timelines, so it’s crucially important to these factors into account when determining to what extent seasonality should play a role in shaping your purchase or sales strategy. A qualified Realtor with a solid understanding of the market fundamental and micro and macro factors influencing market trends should be able to advise you accordingly.

If you have questions about the market or would like to discuss anything mentioned in this article, feel free to send me an email or drop me a line—I’d love to chat. I’m a Vancouver Realtor who is an expert in residential real estate and sell extensively condominiums, townhomes and detached homes.

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