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The Vancouver Life Real Estate Podcast Episode 3 - June 2020 Market Update

Dan Wurtele

Living in Vancouver for the past 26 years it has been exciting to watch it grow into one of the most desirable cities in the world...

Living in Vancouver for the past 26 years it has been exciting to watch it grow into one of the most desirable cities in the world...

Jul 6 43 minutes read

June 2020 Real Estate Market Update

The June 2020 Vancouver Real Estate Market numbers are out and Dan & Ryan dig into these an explain what is driving them.  After taking a look at the Greater Vancouver Market in general, they take a micro look at the Vancouver West market, and howe each three properties types performed.  They discuss current market trends, multiple offers, anecdotal stories, mortgage updates and a forecast into what may happen over the next few months.

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June 2020 Real Estate Market Update


Dan Wurtele  0:02  

Hi, and welcome to the Vancouver Life podcast. 

Ryan Dash  0:06  

This podcast is created to answer the most talked about questions when it comes to navigating the Vancouver real estate market. 

Dan Wurtele  0:12  

I'm your host, Dan Wurtele, a licensed agent and accredited Real Estate Investment Advisor based here in Vancouver, and I'm joined by my co host Ryan Dash

Ryan Dash  0:22  

Hi Dan I'm also a local realtor and exhausted father of two, husband of one and really happy to be here.

Dan Wurtele  0:30  

Let's get right into today's episode. Hello, and welcome back to the Vancouver life podcast. Today is July the sixth and we are talking about the June real estate numbers that have just come out.

Ryan Dash  0:47  

Yeah, the the steady increase in home sales. And I mean actually just steady increase. It's it's fairly significant here. I mean, maybe we'll just say Hit it right off the top and start about the 65% increase in activity.

Dan Wurtele  1:05  

Yeah, that's the biggest headline we've certainly seen people gravitating towards is a 64 and a half percent increase in sales volume over May. It's it's a big number, you know, but it obviously deserves to be unpacked and for us to help give that some some clarity and reference. So while 64 and a half percent is a big increase from May, May was obviously a low number, May was definitely affected by the pandemic and the shutdown and the fact that can't do open houses, etc. And people were really just kind of getting to grips about this reality we are now in and is it okay to go out and buy and sell a home?

Ryan Dash  1:43  

Yeah, I mean, when you look at that 65% number, I think it was, I want to say April, or was it may were actually sales dropped by 65%. So it's, it's it's interesting to see them back up by this number. It's almost like the media Know the market went on pause. Yeah. And then came back,

Dan Wurtele  2:03  

both for reference both April and May were the lowest sales volume in recorded history. So that's your reference. 

Ryan Dash  2:11  

The benchmark was pretty low. 

Dan Wurtele  2:12  

There you go. Let's pull back a bit and see what other references we can make. And of course, let's look at June 2019. June 2019, was a slower year as well. And the numbers for June 2020. Were up 17.6%. Yeah, so off the lower baseline, but we're still in the pandemic. We still are in a state of emergency, and we're seeing volume increases.

Ryan Dash  2:36  

I mean, I think it's interesting because when you if you go back a year and you look at June 2019, we were in the process of a fairly relevant and and aggressive price correction. Right hadn't stopped by that point. And I think people were still you know, on the fence about whether or not it was still coming down or not, and they were still sitting on the sidelines, not to mention In the summer is typically a slower period for real estate sales general. You know, and then you fast forward to today's, you know, announcement and 65% increase in prices and then up 17.6% over June 2019. It's it's not just a stats discussion, there's a lot that's happened inside of those numbers in one side where we were at a huge price correction on the other who were in a worldwide pandemic. So it's very impressive to actually see this increase, I think,

Dan Wurtele  3:34  

yeah, I'll agree with that. And again, to give them an even broader perspective, if you look at the 10 year average, last month, June was about 22%. Under that in sales volume. So what does that mean? Well, June, we did about 2443 homes. That's how many sold in June 2020. The 10 year average is about 535. More than that, so let's call it three thousand. Right, right. So, five 500 homes ish, less, right. But still, I mean, we saw over $2.7 billion worth of real estate trade hands in GVRD last month alone, 

Ryan Dash  4:11  

which is incredible when you consider the fact that that happened without prices going anywhere. 

Dan Wurtele  4:16  

Yeah, exactly right. We'll certainly dig into prices much more in a second here. And I think one more thing I definitely want to touch on when it comes to the sales volume. The phase three was announced around mid June. And interestingly, 40% more homes sold since that announcement than in the first two weeks of June. So we saw about 1000 units sell in the first two weeks of June. Then we saw 1400 sell and the second two weeks. So it's you know, ever since April hitting that sort of bottom, let's call it as far as sales volumes goes. It's been on a very strong trajectory upwards with the last two weeks being the strongest we've seen since the pandemic started. 

Ryan Dash  4:55  

So when we talk about sales volume, let's consider The fact just about every headline I'm reading right now is saying that there's a surge in buyer activity. Dan, would you say that this is these are surge numbers? Or would you say that we are going to consistently start to see this level of activity going forward for the next couple of months?

Dan Wurtele  5:19  

What you touched on earlier was interesting. And that's May, April and May rather we're let's call them duds, right? They were extremely low sales volume. Yeah. And historically, April and May are the highest at the best. Right. So does the term pent up demand come into play here? Yeah, I mean, maybe, you know, again, let's reference the fact that January, February, early March, when the market was pre pandemic, it was very strong. Yeah, sales, were increasing greatly. So it was price and price was increasing. Great. Well, then we hit that wall, and now we're kind of digging out of it. So you know, is it a search based on this crazy world that we're in now? I would think so. I think The numbers are, are a bit of a surprise for most economists.

Ryan Dash  6:03  

Yeah, I think they're a little higher than than what we've expected now saying that the historical story with Vancouver is that it does outperform a lot of what analysts will predict. Right. And it's historically shown that is it doing that? Again? It's hard to say, because it's only been a month at this point. And there's so many factors right now, with the province opening up different phases. You know, demand has changed our borders, the numbers are not what they used to be, you know, so how long does the sustained for does it sustain? You know, and does more activity come as we as we begin to get even more open as an economy? Mm hmm.

Dan Wurtele  6:46  

So I think right now to say, Well, the next two to three months, ie an increase in activity, yeah. My gut says Yes, yeah. We've got very early preliminary data for the beginning of July here. And yeah, numbers are already ahead of June. You know, to three days, but I still have it's it's real data. And yeah, so I think all the people that didn't buy in April or May may be looking at that market now. You know, it's, we've kind of lost the typical cycle of a spring and fall spike. I think that cycle kind of got demolished ever since the stress test came into play. You know, we've seen the market react very differently. And so like a hot season than cold season, it's, it's

Ryan Dash  7:26  

no pun intended. Yeah.

Dan Wurtele  7:28  

It's the really, you know, kind of writing their own book here.

Ryan Dash  7:32  

Yeah. You know, the other. The other interesting thing when I when I did a download on the stats that really kind of spoke to me and this is congruent with sales volume is the actual sales to listing average. Because when you when you really take a look at those numbers, you start to break down the different property types and things like that. But more interesting the the average overall numbers across all property types was actually trending. Towards a seller's market, which is, again, a little surprising considering the pandemic, but you know, with pent up demand and things like that. You know, is it a surprise? I'm not sure.

Dan Wurtele  8:13  

I found it a bit of a surprise. I just pulled up that number. And yeah, 21.4% was our sales to active listings ratio in June. And it's considered anything over 20% is a seller's market.

Ryan Dash  8:25  

Yeah, for a sustained period of time.

Dan Wurtele  8:26  

That's right. Right. We may have only just entered that but it's still an impressive and notable ratio.

Ryan Dash  8:33  

Well, and well above what I think a lot of people were talking about, which is a buyers market or when prices are on their way down. We see that number typically below 12%. And we are way above that. Right. And so I it's interesting for a lot of people to say it comes as a surprise when I tell them that we're trending towards a seller's market. They want to know why. And it's very Interesting question to try and explain.

Dan Wurtele  9:03  

Let's let's look at this, the new listings volume. Right, right. That's obviously a huge factor in this. And while the sales volume was up, what helped contribute to that? Well, in June, we saw 57% increase in listings, new listing as compared to me. So obviously, when you when you've got nicer, better homes available, yeah, people that have been looking for those may just jump on that opportunity. 

Ryan Dash  9:29  

Well, we and had that actually happen in our business where we had been working with a client for actually over a year trying to find the right property. And in all honesty, you know, a lot of the property that was on the market over the last year it was it was okay, you know, and the nice stuff that went on the market, it was everyone competed for it, you know, but as a result, this was a very nice property, again, above two and a half million, and it spent a day on the market. One day, 

Dan Wurtele  9:56  

there you go. 

Ryan Dash  9:57  


Dan Wurtele  9:59  

So this begs the question, what is total inventory then looking like? And right now there's about 11,400 homes on the market. So we look back to June of 2019. It's about 24% less homes a quarter. 

Ryan Dash  10:15  

Wow. Wow. 

Dan Wurtele  10:17  

And sure it didn't pick up finally, and thankfully, in May, were up about 15% over me. But again, let's look at the bigger picture. We're 24% less than a year ago. 

Ryan Dash  10:27  

Holy cow. 

Dan Wurtele  10:28  

That's a big number.

Ryan Dash  10:29  

Yeah. And I I don't know if that's because we're seeing a lot of international demand, too. You know, we've heard of a lot of money coming in from Hong Kong, or transactions that are at the very least happening virtually now. Whereas they weren't happening like that last year. There's property being sold over video tours to international buyers and things like that, which are again, which wasn't happening last year, right. So we're seeing the introduction of technology actually starting to make I think somewhat of a difference here.

Dan Wurtele  11:01  

So with sales and new listings and total inventory, the big question is what is happening with price? And, well, we're still incredibly stable 

Ryan Dash  11:12  

I was gonna say not much. 

Dan Wurtele  11:15  

And fair enough for all property types in GVRD in the month of June prices dipped, they went down point 3%

Ryan Dash  11:25  

which is next to nothing change.

Dan Wurtele  11:28  

Well, it and especially not when you look at our year over year, yeah. So one year ago, the average home in Vancouver was $991,000. Today, that number is up three and a half percent to $1,025,300. Or about a $34,000 increase,

Ryan Dash  11:48  

which is very, very interesting when you consider the fact that again, we are in a pandemic, but I do like to thank the quality of homes that have been hitting the market in the past little while Because activity numbers are up higher than they were a year before, we're starting to see those properties move even properties above the two and a half million dollar mark, which we're finding very interesting. It's it's buyers, depending on the quality of the property, and what the opportunity looks like, we're seeing a big shift right now we're seeing a big, we're seeing it happen. Mm hmm.

Dan Wurtele  12:24  

And to dissect it a little bit further as well. So we look at property type here. Both detached homes and condos increased by the same amount of 3.6% from a year ago, whereas townhomes we're at 2.3% from a year ago.

Ryan Dash  12:40  

So why are single family homes going up more aggressively than the cheaper, more affordable style of homes,

Dan Wurtele  12:48  

it's always going to be demand. If people are searching out that property type and there are fewer of them available. We're going to see upward pressure

Ryan Dash  12:58  

and I think this is Influenced also greatly by the fact that money is very cheap right now. So, you know, if you were in the market for a $2 million home, chances are you've got decent income, you've got a good credit score money right now is very, very cheap. I mean, I think I've seen five year fixed interest rates for around 2-2.1%, which is, which is really, really cheap. You know. So we're seeing people now that were maybe considering a townhouse that are trying to actually skip that step and go from a two bedroom to a very small home and making that change right now and taking on that debt at such a low interest rate. It's an attractive way to do it, because I'm not sure there's going to be much cheaper money in the marketplace for the foreseeable future.

Dan Wurtele  13:48  

Agreed. And I think obviously, as we touched on people, after the pandemic, they may have a different outlook on what they want for a home. So we're seeing some immediate changes that we're going to dig To right now about pricing and demand and where people kind of want to put their money and expense spend their days, considering that, hey, who knows what's gonna happen tomorrow? Right? Is this gonna come back? Is there something worse? We don't know?

Ryan Dash  14:13  

I think that's a big part of it. I know, I read recently, I think it was this morning. You know, we've seen a outbreak of a swine flu. And now we've also seen, I think, did I hear the black plague?

Dan Wurtele  14:28  

Was it ebola there was?

Ryan Dash  14:30  

Yeah, like it's something very deadly to man. And again, you know, changes and issues that our property markets really haven't seen with any real experience, right. So be really interesting to see how these things unfold in the coming coming months.

Dan Wurtele  14:47  

So the numbers that we just shared were for the GVRD for the Greater Vancouver area. Now, it's always good, I think to get a little bit more specific. So Ryan, and I do a lot of business in the Vancouver West area, which is essentially everything west of Maine, you know, from downtown to Marpole and out to the university area. So let's have a look and let's discuss some of those stats and do it by property type to really help give people a more of a micro focus on on this data.

Ryan Dash  15:17  

So we want to start with detached.

Dan Wurtele  15:19  

Yeah, let's start with detached because detached is very, very interesting market right now. Interesting. When I say that, because prices have gone up for I believe, six straight months now in the detached property type in Vancouver West. We have a, an average sale price right now of $3,076,000. For a detached home over there,

Ryan Dash  15:43  

that's no joke, right? That's, that's quite a high number. In all honesty, with a pandemic, you know, you would think that something of that magnitude would drop in value because the buyer pool would would be losing their money in the markets but when you also look at the fact that the markets have recovered, and in a big way here, worse we're seeing this hold stable, really at the end of the day.

Dan Wurtele  16:06  

That six month increase two has equated for a 3.9% price increase over the last year or about $120,000. So $120,000 difference from a year ago to get into your average Vancouver West detached home

Ryan Dash  16:22  

Which is incredible. 

Dan Wurtele  16:23  

Yeah, yeah. And the other numbers are up to right again during a pandemic. We're going June 2022 June 2019 78 homes sold last month compared to 61. Last year about a 22% increase. demand is there. listings are up as well. There are more homes listed last month during a pandemic than the previous June at 204. Which is about a 13% increase. But what could be possibly driving up to this the pricing? Well, there was a 38% decrease in inventory.

Ryan Dash  16:59  

Holy cow, yeah, that's such a drop.

Dan Wurtele  17:02  

Right. So last year, if you had 10 homes to look at this year, you had six. 

Ryan Dash  17:06  

Well, that certainly makes a case for demand

Dan Wurtele  17:12  

Exactly. So let's now jump over to the townhome market again, staying within Vancouver West. Townhomes from a year ago, almost exactly the same price. 

Ryan Dash  17:22  

Yeah, they changed by six grand. 

Dan Wurtele  17:23  

Yeah, six grand and when you're talking about a $1,120,000 price point, that six grand is point 01 percent,

Ryan Dash  17:32  


Dan Wurtele  17:32  

It's minor. 

Ryan Dash  17:33  

It's pretty resilient asset type when you consider going through a pandemic and a massive price change. It's actually it's it's pretty consistent.

Dan Wurtele  17:42  

Yeah, unlike detached, townhomes are on a bit of a downward trend in pricing, about four, four or five months of downward trending prices. Again, we're right at where we were a year ago, but the interest in this asset class or this type of home has been decreasing. In like, like I said last three, four months, five months?

Ryan Dash  18:03  

And do you think that's because of an increase in demand for the single family properties?

Dan Wurtele  18:08  

I really do. I really do. It's, we're also going to see these similar numbers in the condo market. And what we're seeing for other reasons there, which I'm sure we'll get into is people now more than ever, and I think largely due to the pandemic want to own land and want to have control,

Ryan Dash  18:26  

right, So if that narrative plays out, right, and the demand for single family homes continues to grow, that will push prices like we've seen in the past. I don't know if they'll grow like the we've seen in the past, but it'll certainly the focus the attention, the desire for that property type will shift in that direction. Now, there are far fewer single family homes available than any attached form of living. So yes, you will see a shift and push in that direction. But once supply diminishes, you will see then the return towards bigger attached living. Right. I mean, there's only so much single family property available before people have to or are forced back to a different option. Right. We've seen this in the past. So while I seem to while I think that this is yes, it's a downward trend. Do I think it's a long term downward trend? No, I think that this is a blip. And the reason I say that is for the reasons I just brought up, once your inventory and single family home starts to decrease dramatically, we're already starting to see the signs of that. The price will then start to move up. But then people once once the price point gets out of reach, they will start to go back towards other property types, at which point you'll start to see those prices increase. We see this because sales volume is the leading indicator typically to price right so as sales volume continues to increase for single family and detached homes, likely the price will come after that. And then the other asset classes will follow. But it will take some time

Dan Wurtele  20:10  

to give you guys an idea of what happened in the Vancouver West area for detached. There was like a 90 year old tear down. We were very much keeping our eyes on. And this property was in point grey, but you know, up on Fifth, and the property hit the market in June at a 3.499 kind of price point. I believe it had 40 ish groups through it and the first week yeah, they held offers and the property received six offers and sold over ask in one week. Yeah, this is a tear down.

Ryan Dash  20:46  

Yeah, it was it was scary. You know?

Dan Wurtele  20:48  

Yeah, sure. Nice law, you know, a tiny bit of a view on the top floor, maybe but, you know, that's that's three, three and half million plus what another 1 million plus to build 

Ryan Dash  20:57  

the minimum. Yeah, to pay for that and neighborhood, you know.

Dan Wurtele  21:01  

So there you go. That's the kind of demand that we're seeing right now in June for detached but 

Ryan Dash  21:06  

tear downs. 

Dan Wurtele  21:08  

So just to kind of wrap up some townhome numbers here, the sales volume, almost the same as a year ago, listings were up newly listed, but of course the inventory way down similar to detach we're down with 34% in inventory for your townhome

Ryan Dash  21:25  

right and with an inverse relationship between supply and demand, like like we just talked about, you know, will we start to see prices move back in the other direction? in the in the future here? Yes, so long as the supply continues to diminish and single family.

Dan Wurtele  21:40  

Yeah. And I think a good reference to that, too, is we hope we've got a 17% sales ratio and townhomes Yeah,

Ryan Dash  21:45  

Vancouver was very balanced, right.

Dan Wurtele  21:46  

And that's up from 6% a year ago. So when you've got low inventory combined with an increasing sales ratio, it's Yeah, I definitely agree with your analysis. Ryan. I think prices are going to stabilize and potentially increase in the town. home market in that area. 

Ryan Dash  22:01  

Yeah. Yeah. It's just got to give it some time.

Dan Wurtele  22:04  

Okay, let's talk condos. 

Ryan Dash  22:06  


Dan Wurtele  22:07  

All right. condos. Well, starting with price because that's what everyone's interested in. Yep. The average Vancouver West condo up 5.7% from one year ago.

Ryan Dash  22:17  

What does that equate to?

Dan Wurtele  22:18  

big number? It's $45,000 on average for your $789,000 condo. 

Ryan Dash  22:24  

So just for living in my house, or living in my condo last year, I roughly made 45 grand.

Dan Wurtele  22:29  

Yeah, yeah, but half a percent per month. It went up on average. 

Ryan Dash  22:33  

That's really good. 

Dan Wurtele  22:34  

That is Yeah. That is a that is a very real and kind of an exciting number for some people.

Ryan Dash  22:40  

Yeah, I mean, when you look at June 2019. In terms of sales figures, we saw roughly 254 condos sold. This June however, we're up about 10% to 282, which is which is great. Seeing that push towards A little bit of growth. Right?

Dan Wurtele  23:02  

That's it and similar story to both other types of homes, a nice increase in new listings, you know, up 27% over last year, but again, a low baseline, right. So we're still 17% under from a year ago.

Ryan Dash  23:17  

That being said, when you do see a year over year growth like that, from 600 to 824 units, what does that tell you about seller's appetite for the market? You know, I think that that, to me, it's, it's, you know, they're they're far more interested in either making that move up. So they're really looking forward to getting out of their property. Or, like we've talked about before, you know, there's been a stable increase in prices here. So people are now prepared to check out and maybe either get out or or change their property type, their asset type.

Mm hmm. You know, that's exactly true. So the appetites there, and that's also resulted in a huge jump, actually in the sales ratio were a year ago. Yeah, we were we were under 5% sales ratio, or sorry, we were at 14.4%. We increased by 5% to 19.2%. Right now, which is 

Just shy of a seller's market. 

Dan Wurtele  24:14  


Ryan Dash  24:14  

Right. And and if that continues to maintain, we're going to see nothing but a seller's market. For a lot of these property types. It's just like we said, it's going to take a little bit of time. Obviously COVID dependent,

Dan Wurtele  24:30  

right. Now again, one thing we should definitely mention too, in the immediate history is in the past four months, we have seen Vancouver West condos start to dip in price. So while they're nicely up, you know, over 5% year over year, we've seen as much as a Gosh, about a $20,000 decrease in the last three, four months. So they've come down off of that 5% increase to where they are now.

Ryan Dash  24:55  

And that and again, I think that that's that short term trend, moving away. From attach living to getting into too attached or changing a marketplace or something to that effect, right? As people have to spend more and more time in their condominiums, that being said to you know, the rental market for condominiums has taken a little bit of a hit. And that's resulted in some lower rents. Right. So, in the short run anyways, we've seen a small dip. Whether that maintains well, it'll depend on the economy, largely.

Dan Wurtele  25:27  

Mm hmm. Yeah, I think that's something we can touch on too at the end when we wrap up and think what's going to happen or discuss what we think is going to happen over the next three, four months here with properties. So, one thing we should touch on also Ryan is the presale market. We've been talking predominantly today about resale, and we certainly have some close colleagues in the presale market and we hear their anecdotal sort of boots on the ground stories about what's happening. And we'll give you that along with a top level of mentioning that, you know, June was sort of when the trade desk when the Presentation centres rather opened up again and generally not to the to the general public, but you could start booking your private showings of these presentation centers again, and that didn't really exist back in May. No at all. You know, they were being safe and good good on them for making that call. So to give you a bit of an idea, I mean, the presale market was was hit very hard.

Ryan Dash  26:20  

Yeah, It shut right down.

Dan Wurtele  26:22  

I would say harder than resale. Yeah, I think the numbers were much scarier for that world. But it's like the resale market. It's starting to come back it's showing some lights and to give you a reference there in the month of May have all the units that were brought to market only 10% sold. 

Ryan Dash  26:41  


Dan Wurtele  26:42  

Yeah, pretty small number but that has increased for June and it's a 14% sell through rate. So 4% 4% you know it's not too exciting but it is in the right direction 

Ryan Dash  26:54  

well when you can you can now that that is sales volume, guys. That is not price right? To deal with That's right. So we're seeing an increase in, in total purchasing up by about 5%.

Dan Wurtele  27:07  

As a anecdotal reference, one of our colleagues works in a presentation centre. And she mentioned for last week and next week, they are completely booked from or five days a week that they're open from open to close. And these are, these are about one hour presentations, okay. They take one group through, they get one dedicated hour, this is between noon and 6pm. And they do not have an opening for two weeks. 

Ryan Dash  27:31  

See, that is very interesting information, because you're not going to read that report. Right. Right. And that is a huge indicator in terms of interest level and what people are doing. Right. So having, you know, listeners understand that that's what's actually taking place. It's indicative of what may be coming to,right. 

Dan Wurtele  27:50  

It's as it resonates. It's a similar story to what we're hearing from our mortgage brokers, our lenders, our colleagues at banks, most of which are saying they have never had more mortgage applications than in the last 30 days. 

Ryan Dash  28:04  

Yeah they're swamped

Dan Wurtele  28:05  

yeah the the interest in obtaining a mortgage at this point is at unprecedented levels

Ryan Dash  28:10  

and again that comes to interest rates right i mean when you're looking at interest rates below two and a half percent some areas sometimes even as low as 2% you're going to get a ton of interest right and and with the performance that the province has gone through in terms of its health performance people are are looking for opportunity now

Dan Wurtele  28:32  

Yeah, let's let's make people aware as well that presale market obviously developers have not been releasing new product new buildings to the market for at least four months now 

Ryan Dash  28:43  

they're selling out their their projects that they put on hold or that they haven't gone through yet. 

Dan Wurtele  28:47  

Yeah. So you know these numbers are okay for for their sell through rate. But we will be seeing likely, barring any future second, significant waves. We'll see some new product coming Probably by late fall and winter, and of course, that will likely increase your sell through rate because people are looking for the new product right?

Ryan Dash  29:07  

And different areas.

Dan Wurtele  29:08  


Ryan Dash  29:10  

So we got a little something new for this round that we want to talk about. And it's our notable property of the month.

Dan Wurtele  29:19  

Yeah, of course, being agents, buying and selling almost every other day here. We hear a lot of stories, and we're a part of a lot of stories 

Ryan Dash  29:26  


Dan Wurtele  29:26  

And every now and then there's a property that really stands out that you're just wow, we got to tell some people about this because it's interesting.

Ryan Dash  29:33  

Yeah. So I mean, the unit we're going to talk about here was in the Jacobsen building, which is 256 East second ave. It's actually a literally around the corner from my house. It's a great building. It's beautiful. Great, very unique floor plans. And the this was a studio. studio apartment which was 11 years old, measured 440 square feet in size. It was assessed by the government to $409,000 in 2019, the list price was 419. And then what happened?

Dan Wurtele  30:10  

So they they hit the market, I believe it was on a Wednesday. And they knew there was gonna be big interest in this property. Yeah, these studios rarely come on the market, even though the building has, you know, I think 123 some odd units in it, there's only a few studios. So it had been years since the set, a similar unit had come on the market. They the listing agents held, offers, and held that for five days, and then they were only allowed access to this unit, I believe, through the weekend through Saturday and Sunday.

Ryan Dash  30:42  

Just FYI, when you hold offers, that means you can't come and see the property and then make an offer right there. You have to wait five days, and everybody submits their offer on the same day.

Dan Wurtele  30:51  

Mm hmm. So being a studio, they knew people who could get through this pretty quick, you know, you're in and out in 10 minutes. So they had these, I believe three four hour gaps are segmented sections of time where they could show the property. And they just literally had private showings back to back to back to back every 10 minutes every 10 minutes. Right. And so apparently about 60 to 70 groups came through the scheduled viewing time weekend. So then of course, Monday came along, it's it's offered. How many offers Do you think came in? Well, Ryan,

Ryan Dash  31:26  

yeah, it was it was 24

Dan Wurtele  31:29  

24 offers came through on this one property. And this is not 

Thats a ton of interest. 

Yeah. This was listed mid June, right. We're only talking about three weeks ago here. Yeah. So 24 offers a number of those were subject free. Yeah. And again, the list price 419. The winning offer took it at $505,000 thats $86,000 over asking or about 17%.

Ryan Dash  31:55  

That's incredible. I mean, that's that's your Olympic Village area. A small studio level of interest. Now that being said, it's very difficult to live on the seawall for less than half a million bucks. So, you know, does that total sale price really surprised me? Not necessarily. 24 offers definitely surprises me. You know, I think it also looks like a beautiful property too. So that definitely helps. But still an absolutely staggering sale price when you consider the list price and when you consider the amount of offers that came through.

Dan Wurtele  32:35  

And that's also referenced the last time a similar floorplan was sold was 2012, $295,000.

Ryan Dash  32:43  

Wow, that's incredible. That's a 40% growth somewhere to that effect. That's incredible.

Dan Wurtele  32:48  

Yeah. Okay, so I'd like to quickly touch on mortgages, as we talked, touched on a little earlier. Of course, money is aka cheap. Mortgages are available at literally record low rates. We're seeing five year fixed rates right now, in the 2.19. ballpark for insured mortgages. 

Ryan Dash  33:10  

That's incredible. 

Dan Wurtele  33:11  

Yeah. And of course, we heard the other day, HSBC announced the first ever 1.99% mortgage. 

Ryan Dash  33:19  

So what's really, really interesting to me right now is you can get a really good rate for an insured mortgage. So, if you can, oftentimes, I've seen at least in the last little bit here that you can, you can get a better insured rate than you can, if you've got 20% down. So then the question starts to come in your head in your mind here, am I better off putting 5% down and paying a premium on on my mortgage than I am, you know, putting 20% of my cash down on this property?

Dan Wurtele  33:51  

Yeah, it's always gonna be case by case and it's interesting thing that you brought up around, I actually had clients who ran their mortgage numbers from anywhere from 5% to I believe, 25% down, right, what they had to pay. And interestingly, their magic number was 17% down payment. Is'nt that interesting that resulted in their lowest monthly and of course, their lowest amount of interest rate interest rate? Yeah.

Ryan Dash  34:16  

Well, that. So there you go. So it's, you know, it's definitely a worthwhile conversation with your mortgage broker to find out, you know, we often think that 20% down is the best case, but it's really not you need to have like Dan said, it's case by case you really need to have that conversation with your mortgage broker.

Dan Wurtele  34:34  

So there we are, that is basically what happened in June for GVRD, and for of course, Vancouver West area. Now, what do we think is gonna happen next? And when we say Next, I think we it's fair to give about a three month horizon.

Ryan Dash  34:48  

Yeah, otherwise it's unfair question.

Dan Wurtele  34:52  

And it's a Yeah, I think people are going to be making three month decisions potentially here. So let's provide that.

Ryan Dash  34:58  

Yeah, I mean, June I think was was really I want to say it was probably the most consistent month that we've seen in the last three or four months. That may seem more sound obvious here. But that allows us to give us kind of bit of a benchmark moving forward. I do think that you're going to see in the next two months anyways, through July through the month of August, people are going to go on vacation, but they're not leaving the country, right. So their vacations are going to be shorter. And on top of that, they're going to be connected, which means anything they were looking at prior to leaving on their vacation, they may still do a deal on while they're away. I know I'm going through this right now. So with that being said, Do I think prices or do I think sales volume activity is going to slump in the next three months? I don't I think the numbers that we're seeing right now are going to stay consistent. I think we're going to continue along the path that we're going on right now in terms of performance, I still think that, you know, as long as they keep money, relatively cheap, the virus stands at bay. We stand to see, you know, a good couple of months here of forward progress.

Dan Wurtele  36:18  

Interesting take. I've got similar but some objecting views where, again, because we're seeing so much demand for land, being your detached homes and your half duplexes, right people that do want to move out of strata, people that do want to own physical land. I highly agree and think that those two markets are going to see continued appreciation values, because the demand is so big, right? I mean, if you're after a Vancouver East detach between one five and 2 million, you are competing heavily, totally, the demand for that is huge. And of course prices will equate to that. Whereas we may now see now that we're in phase three now that tenants can legally or technically be evicted again, yeah, we may see a bit more of an influx in condo inventory hitting the market. Again, with insurance issues still existing, you know, with strata fees skyrocketing for a lot of people, I think that asset May at least in the short term until potentially the government gets it together and does like Alberta and actually puts a cap on insurance premiums, we might see that product have a little bit less demand in the immediate future and higher inventory resulting in flat or potentially slightly downward prices. And when I say downward, you know, we're not talking about crash, as some people would love to hear, but we're talking maybe five to 7% range over the next six months.

Ryan Dash  37:43  

At which point, what happens after that?

Dan Wurtele  37:48  

There's a lot of variables, right. I mean, let's talk about some of the other things that are happening that we are waiting to really get the see the outcome of including the employment rate or unemployment rate, right, how many jobs are actually going to come back from this thing,

Ryan Dash  38:02  

are our restaurants ever going to be able to work at their full capacity again, right? Are nightclubs going to open up again? Are concerts going to be a thing? You know, there's there's a lot of things here that are impacting how our economy is going to move forward as well.

Dan Wurtele  38:18  

Big One, too, recent headline that I'm seeing a lot of people talk about or get excited about is what we're calling the deferral cliff. Right. What happens when the current mortgage deferral period comes to net? Right, it's apparently 15% of all Canadian mortgages have been deferred. And then people think, Well, once that deferral period ends that everyone instantly goes into arrears. Well, I'm going to put myself out there, and I think the number is going to be small, I'm going to say it's gonna be less than 2% of mortgages will go into arrears within the next six months.

Ryan Dash  38:52  

Yeah, and I don't think that'll, that'll have a huge impact on our market. I do definitely agree with your short run analysis. I don't see how, you know, as people make a move towards a different asset class and try and get more space with cheaper money, how that doesn't affect the opposite asset class, it has to, right at least in the short run until we start opening our borders again, and we go from 4000 to 27,000 people a month coming back into the the province, or sorry, the country, then that will change again, the demand for attached properties and things like that. But until we see that, yeah, I do think there's gonna be some movement in the attached markets.

Dan Wurtele  39:35  

The deferral rate as well let's let's put a bit of a timeframe on it. The deferral cliff or the end of that grace period is about two to three months away. It takes another three months from then for anyone to be technically in a three month areer position before it really hits the bank's radar, and then they will start picking up the phone and reaching out and seeing, so then should the home even actually go into foreclosure. And then the banks have what another six to 12 Before that likely even hits the market. I mean, we're 12 to 15 months out before we see any kind of significant amount of foreclosure homes hitting the market. And don't think those are sold at a fire sale. 

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