With our Real Estate market continuing to make headlines in the media, there is no time like the present for fact-checking and taking extra time to seek out reliable information. A great deal of media has surrounded the drop in home prices and the rise in living costs. Though it’s evident that neither of these is untrue, it is important to understand that the statistics presented as means of supporting these claims may lack some context. It’s been stated that home prices have dropped anywhere between 15-20% since the height of the market in early 2022 – numbers equally alarming as they may be misleading…
When considering the formula for this calculation (Total value of home sales / # of homes sold), an important factor to examine is the type of properties that make up these figures. With interest rates rising, there has been an apparent shift in the type of properties that buyers are purchasing. Looking more closely at the monthly statistics will reveal that lower-value properties (such as condos) have been the recent preference of buyers, versus more expensive luxury listings. The resulting decrease in the total dollar figure of home sales based on the property types being purchased causes the average home price to drop, though not necessarily as a reflection of individual property value.
In short, yes home prices in Vancouver have declined – this is unarguable. But by factoring in the composition of property types into the equation, the drop is closer to 7.6% which is far less alarming considering the interest rate hikes that lead us to expect this effect. But what goes up must come down – and by adding context to headlines and seeking out expert advice, buyers and sellers can be enlightened about the opportunities that remain in our market. As I’ve said before and will say again – our market continues to surround us with excellent opportunities that can be capitalized on through trusted advice and smart decisions.
If you have questions about the market, please reach out as we always look forward to hearing from you!