January 2023 – 2022 had a more positive year end for the North Shore real estate market than most would have expected. While sales in the 4th quarter of the year (182 detached homes sold) represented only 15% of annual sales (1,175), this is typically a slower season even in the best of times. Nearly 80% of all home sales in West Vancouver in 2022 were between $2M – $5M and 60% of all home sales in North Vancouver were between $1.5M – 2.4M. This represents the true sweet spots for the market(s). The main reason the market shifted from being quite robust in Q1 & Q2 was threefold: (1) interest rates, (2) buyer fatigue & (3) record low levels of inventory.
Low inventory – Currently in West Vancouver there are 265 detached homes for sale, but only 50% of these are in that sweet spot between 2M – 5M. Because 80% of all WV sales from 2022 are in this category, this means there is less than 3 months of inventory on the ‘real estate shelves’. This is low. North Vancouver is even more stark with under 50 homes for sale in the sweet spot between $1.5M – $2.4M. While we all predict that more homes will come on the market in the coming weeks and months, the inventory numbers will need to increase dramatically in order for prices to start dropping substantially.
Tax Assessments – The 2023 Tax Assessments are out and in most cases they are up ever-so-slightly. Keep in mind that these figures represent the Districts analysis of the value of your home from January 1, 2021 through to July1, 2022 (18 months). It wasn’t until AFTER July 1 that sales volume and prices began trending down.
Government Policy – Because of the scorching real estate market through Q1 & Q2 of 2022, our government – both provincial and federal – have introduced and now implemented several policies with the intent of ‘cooling and correcting’ the market. As we typically see in real estate, the policies come too late when the market has already shifted, so we’re left dealing with things that don’t necessarily apply to the current situation, but are meant to have an impact. The main policy changes are: (1) Foreign buyer ban (2) Contractual ‘cooling off’ period (3) Elevated levels of taxation around speculation, vacancy, “flipping”. For a full summary on these, please visit my website under the “WHAT’S THE LATEST” section or better yet, call me as it’s a complicated situation requiring a detailed conversation.
What’s in store for 2023? – My feeling is the market will be stable and possibly might even increase slightly this year. There are key indicators including (1) interest rates, which may fluctuate but not as dramatically as they did in 2022 (2) unemployment has peaked and is trending down now, (3) immigration is fully loaded up and BC will see 50,000+ new residents in 2022, and (4) low supply/inventory, as outlined above, as long as the inventory of quality West Vancouver homes remains low, prices will not be impacted. Further compounding the situation is that the previous 2 quarters of 2022 yielded low sales volume, which means buyers are in the wings waiting, watching and ready to make a move.