Wednesday, April 05, 2017

REBGV Sales Update Through March 2017

REBGV released their stats package through March 2017. Here are the numbers:





Sales have recovered and are now "average", but nowhere near the levels seen in 2016. Inventory is low and new listings have been low, albeit new listings have recovered in recent weeks. The result is a "lowish" MOI (months of inventory), which portends a decent spring in terms of price growth (not crazy but not weak either). A long stretch of robust new listings is required to allow low inventory to recover.

Why are new listings so low? There are two reasons I think are both acting to suppress listings. First (pointed out to me by Aaron Vaillancourt) many listings manifest due to homeowners moving properties; if there are few listings then there is nothing for homeowners to buy and they will therefore not list. This is somewhat analogous to a "liquidity crisis", and the solution is to lubricate the market with more supply (which is coming later this year). 

Second with higher inventory levels the number of properties that do not clear in a given sales season are higher. Some of these properties will be listed the next season. In 2015 and 2016 the high level of sales has meant most of this inventory has cleared, pushing resultant re-listings are down.

Attached housing (townhouse and apartments) continues to be stronger than single detached housing in terms of price strength as measured by the change in the MLS-HPI (see link at beginning of this post). This closing of the gap between housing types is to be expected in the wake of detached housing prices having had accelerated in previous years.

I continue to see no evidence to suggest a significant slowdown will occur in 2017. That is not to say a significant slowdown won't occur, but I don't see any evidence supporting it.

2 comments:

Louie said...

Hi Jesse,

Do you actually have this data in a nice tabular format somewhere? I've noticed an interesting pattern regarding the carried forward supply from the previous year that I'd like to dive into. I'd like to check at what level price erosion starts happening.

Cheers,
Louie

jesse said...

https://docs.google.com/spreadsheets/d/1zfoMB7JyEx9LYN-HMWbD0FHobbNRQbpBpTszj1h_oDg/edit?usp=drivesdk