Last week we looked at the percentage of new listings sold by each neighbourhood, but what does the entire market look like since the pandemic started?
When the pandemic started there was a lot of uncertainty throughout the world, who am I kidding there still is an amazing amount of uncertainty, I am not even sure any question we originally had has been answered, we are just learning to live with the new normal. With that uncertainty, my economics background kicked in and I immediately started to monitor the inventory levels on a weekly basis. Everyone was predicting a housing crash, all though this still very well could be a possibility down the road for the short term it has not come to fruition.
Economics101 indicates that when you see prices decrease, often one of two things has to happen with all other things considered equal. The first one is that supply has to increase with respect to the amount of demand and the second one demand has to decrease with respect to the amount of supply. To monitor the inventory levels on a weekly basis, I have chosen to monitor the weekly list to sell ratios which gives us an idea for all the new listings coming on the market how many homes are selling in that same week.
We haven't seen any indication for home prices to decline so far in this pandemic for the real estate market in the Okanagan, we are seeing for the most part prices stay the same and for certain properties, the prices are actually increasing for certain homes.
Looking at where we started and where we are today. Here is the list to sell average percentage for each month.
Looking at the percentages, this gives an idea of how the market has progressed through the pandemic, going from 36% of homes that were listed selling, to where we are at currently with 88% of the homes listed being sold. Putting it into perspective, out of 10 homes being listed we went from 3.6 homes selling that same week, to 8.8 homes selling that same week. This past week we saw a ratio of 109% which means that out of every 10 homes that listed 11 sold, further decreasing the inventory.
When the pandemic started we saw an immediate contraction in the amount of new supply it was varied but roughly 50%-75% reduction in supply based throughout March and April than what a 'normal' year looked like. Demand also immediately dropped and only people that needed to move were moving it was operating roughly at 50% capacity.
Throughout the pandemic(that we are still in) things have changed, everyone adjusted that is what we do. The housing market has changed with it, limited inventory as people choose to not sell for a variety of reasons we likely will continue to see inventory decrease as we go deeper into fall and winter.
PSA: if your plan has been to sell or buy in the next year, within the next 4-5 months might be the best time, before banks start asking for 2020 income tax returns for mortgages.
Have a great week and reach out if you have any questions.