Greater Vancouver was still witnessing an unseasonably high level of real estate inventory as the first month of 2009 wound down. In fact, active listings rose steadily throughout the month after the large amount of expirations traditionally associated with the beginning of the year.
Sales were at the lowest levels not seen for over a decade. In fact, I do not have data going back far enough to see a lower sales month for January.
Consequently, the supply / demand metric that I like to focus on - Months of Inventory - is at an extremely elevated level to start the year. As you can plainly see, months of inventory typically rises from February/March through the fall. I think we can expect MOI to fall from this level during February and perhaps March as sales typically pick up, which changes the denominator of the MOI.
The correlation of quarterly price changes and months of inventory is still highly correlated.
The benchmark detached house price moved up by 1.7% during January compared to December and I must admit this seems a bit unusual given the extreme supply / demand pressure in the market. From month to month we can see deviations from the fairly solid relationship between Months of Inventory and price changes but on a quarterly basis there is much less deviation. I am looking for price changes to smooth out over a quarterly period.
I expect that the rise in the price attributed to January will be gone by the time we finish March. Over a three month period the correlation between Months of Inentory and Price Changes suggests that we will see a quarterly price change of -5% to -10% when MOI is around the 20 mark.