A common refrain: housing inventory is constrained - The Orca
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A common refrain: housing inventory is constrained

Ryan Berlin
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Ryan Berlin: The main real estate story in Metro Vancouver has been, and continues to be, all about supply - or lack thereof.

The main real estate story in the Vancouver Region has been, and continues to be, centred on housing supply–or rather, a lack thereof.

To be more precise, inventory levels–that is, the number of homes available for purchase at a given point in time–fell to 12,379 in September, which is the lowest count for any September since such data were first collected in 1989.

September was the fifth straight month of receding inventory, with last month’s count down 36% from 2020’s September number. What gives?

Well, for all of the chatter about softening sales counts, the fact remains that buyers continue to be active in our region’s housing market. For example, while we failed to crack the 5,000 threshold for sales in September, we did tally 4,951, which is 29% higher than the past 10-year average for September. It extends a run dating back to the end of 2020 which has seen more sales accrue in the past 12 months (71,551) than in any 12-month period pre-dating the pandemic (the next highest 12-month sales count ended in June 2016, at 71,299).

So demand is strong (notably in spite of the relative dearth of international migrants we’ve welcomed since the beginning of Covid!).

Having noted the above, it is tremendously fascinating to us that new listings activity–that is, the number of homes that are newly-listed on MLS each month (which are added to that month’s inventory if they don’t sell)–has reached feverish levels.

To be specific, the past-12-month new listings count in the Vancouver Region was in excess of 100,000 in September, sitting at 100,295. This metric has been above the 100,000 threshold for 6 consecutive months and peaked at 108,604 in May. Compare this to a previous 12-month high of 92,752 in September 2016.

So incredibly, despite the region’s sales-to-listings ratio sitting comfortably in sellers’ market territory since June 2020–meaning the housing market playing field has been tilted in favour of sellers for 16 months, bidding up sold prices–the lack of balance in our current market would be far worse than it is if we hadn’t achieved record new listings activity.

In some ways, new listings have played the role of unsung hero, accruing in the background at never-seen-before levels while most of the attention has remained on elevated sales counts and depleted inventory.

The early returns for October are showing further declines in inventory as sales counts are marching upwards and new listings slow (at the margin).

If this continues for the next few months, we could see conditions remain challenging for buyers through to the new year.

Ryan Berlin is the Senior Economist with rennie intelligence.

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