As market softens, rate of price increases will de-escalate.
Although the last 12 months of activity or YoY MLS® Home Price Index increased by $26,250 April to May and, at $1,474,950, represented a 60 per cent increase from May 2020, there are indications that market is softening.
The YoY Median Sold Price experienced the largest decrease in the past 10 years, down $39,000 or -2.5 per cent in May compared to April. Also down, the YoY Average Sold price saw a drop of $9,400, May compared to April, and although only -0.5 per cent, this was the first negative change since February 2021.
YoY the average property sold for 98.6 per cent of list; however, the average gap between List Price and Sold Price month-over-month has trended down since January, with the Average Sold Price during May reaching a 9-month low of 95.5 per cent of list (i.e., $1.432,500 on a $1,500,000 property).
Listing prices on new properties coming to market will reflect consumer concerns over inflation and rising interest rates, a slowing market, and new provincial regulations. The BCFSA (BC Financial Services Authority) intends to add both a) a specified number of days a property must be on the market prior to sellers taking offers, and b) a rescission to allow buyers to revoke an accepted within a set time-period, much like we see in the retail industry. These new regulations, and others that may be coming, are designed to give the buyers more opportunity to consider their options and their actions in a less pressurized environment.
We can expect to see a significant reduction in the rate of price escalation. Detached properties on Bowen have escalated at the rate of about 2.0 per cent per month over the past 2 years. Moving forward escalation may be closer to 2.0-3.0 per cent per year.
At this writing, only one property has sold on Bowen Island during the month of June 2022. Bowen Island is entering a balanced market where buyers will have more latitude to negotiate.
The YoY Median Sold Price experienced the largest decrease in the past 10 years, down $39,000 or -2.5 per cent in May compared to April. Also down, the YoY Average Sold price saw a drop of $9,400, May compared to April, and although only -0.5 per cent, this was the first negative change since February 2021.
YoY the average property sold for 98.6 per cent of list; however, the average gap between List Price and Sold Price month-over-month has trended down since January, with the Average Sold Price during May reaching a 9-month low of 95.5 per cent of list (i.e., $1.432,500 on a $1,500,000 property).
Listing prices on new properties coming to market will reflect consumer concerns over inflation and rising interest rates, a slowing market, and new provincial regulations. The BCFSA (BC Financial Services Authority) intends to add both a) a specified number of days a property must be on the market prior to sellers taking offers, and b) a rescission to allow buyers to revoke an accepted within a set time-period, much like we see in the retail industry. These new regulations, and others that may be coming, are designed to give the buyers more opportunity to consider their options and their actions in a less pressurized environment.
We can expect to see a significant reduction in the rate of price escalation. Detached properties on Bowen have escalated at the rate of about 2.0 per cent per month over the past 2 years. Moving forward escalation may be closer to 2.0-3.0 per cent per year.
At this writing, only one property has sold on Bowen Island during the month of June 2022. Bowen Island is entering a balanced market where buyers will have more latitude to negotiate.
Month of May Detached Homes
SALE PRICE vs LIST PRICE
• Low $950,000 $998,000
• High $2,150,000 $2,200,000
• Average Sale: $1,466,666
• Median Sale: $1,300,000
YoY INDICATORS
MLS®HPI: $1,481,650
• Average Price: $1,900,394
• Median Price: $1,559,000
YoY Lots Average Sale Price Range
$17.22–23.67 per sq. ft.
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