It's no secret that the Greater Vancouver real estate market is cyclical. Inventory rises in the Spring and Fall, and for the most part, drops in the Summer and Winter. Traditional logic says to wait until the Spring to buy, but does this hold true in the numbers?
Let's dive right in and look at the statistics:
First, inventory.
Just as described above, it's very apparent that inventory drops off quite sharply towards the end of each year.
Now, What about Prices?
Examining over 10 years of average sale price, you'll notice quickly that right around the end of each year, there is a slight drop compared to the trend prior to and after the winter months. While inventory does indeed see a drop in the winter, savvy buyers will notice that this time often presents a great opportunity to purchase.
What happens in the winter to cause this slight price relief? There are a few reasons, and most of them are simpler than you'd think:
The Weather
Yes, seriously. The colder temperatures especially when roads get snowy provides a strong enough reason to stay indoors and forego the home search process for many. Those willing to trek out will notice that sellers who remain on the market during this time will typically have a higher motivation to negotiate towards a deal.
Holiday Festivities & Family time
Those who wanted to sell in a given year likely already have. Most people don't have much interest in moving amidst the holiday season. Many of the sellers who remain on the market are generally there for a reason, not because they want to be. Either they haven't captured a buyer's attention after being on the market for awhile, or are listing out of necessity. It isn't a guarantee, but it's not an outlandish assumption that homes on the market during December have more urgency to sell than other times of the year.
THe Market heats up in the spring
This reason isn't one that explains a dip in pricing through the winter, but rather why it may be a great time to buy. As mentioned off the top, the real estate market in Greater Vancouver has a very cyclical trend. Year after year, buyers who put their nose to the grindstone and battled the elements to purchase a home later in the year have reaped the benefits of seeing property prices increase just one quarter later.
If you've been sitting on the sidelines and waiting for your opportunity to jump in the market, December may be your lucky month. Of course, it never hurts to start the search!
Looking to navigate your way into the real estate market? Feel free to email me at adil@adilkhimani.com for expert guidance.
Thanks for reading,
Adil