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A seller's market, even more so

Sure, total listings in the Vancouver Region rose for the first time in seven months - to the second-lowest monthly total ever recorded, as the local housing market remains tight.

In many ways, our local housing market began 2022 where it left off in 2021, creating conditions that continue to strongly favour sellers. And while there may have been a much needed directional change when it comes to the total inventory level in the region, supply continues to be constrained at a historically low level.

Specifically, the total number of homes for sale actually rose in January (by 9%)—the first time a month-over-month increase had been seen in seven months. This increase in inventory, however, only brought total listings up to 7,347 by the end of the month, a level that was 38% lower than in January 2021, and that saddled January 2022 with the second-lowest inventory count recorded in any month in the Vancouver Region (the data goes back to 1989).

Put slightly differently, even with a growing listing count in January, we weren’t able to get back to the previous record low that existed prior to December 2021.

As we look ahead, it’s worth noting that the typical seasonal pattern in the early part of the year is one of rising inventory. Our region, however, is starting from a point where it is so dramatically supply-constrained that a single month of rising listings—a positive sign, no doubt—is simply not enough to alter overall market dynamics.

Sales in January, while 11% lower than one year ago, remain elevated in a broader sense, with last month’s 3,555 MLS transactions being 32% higher than the past 10-year January average. With a small but notable influx of new listings last month, some buyers would have had, at the margin, a few additional options available to them, resulting in some previously frustrated demand being satisfied. Regardless, the region’s housing market continues to be characterized by the persistence of conditions that overwhelmingly favour sellers, and has for the past 2 years.

These market conditions once again brought about substantial price growth in January. On the heels of an average increase in the benchmark price across the region of 23% in 2021, January brought an additional increase of 3%. Inflating values were again led by the Fraser Valley board area, where the benchmark price rose by 3.6% last month, compared with the Greater Vancouver board area, which saw its benchmark price increase by “only” 2.0% in January.

The early supply-side returns for February reveal a similar pattern to January, with the total listing count inching upwards. Given where we started the year and the pace of increases to-date, it will likely require many, many months before inventory returns to levels typically associated with a balanced market (that is, listings in the neighbourhood of 20,000).

Ryan Berlin is the Senior Economist with rennie intelligence.