Mortgage interest rates, inflation, employment, investment, construction, immigration, government assistance programs, and the health of local and world economies are factors that can impact the housing market. All of these influence the supply and demand of the market which, in turn, affects prices.
There are three classifications experts use to describe the balance of supply and demand in the housing market:
A seller’s market is when there are more people looking to buy then there are homes available. This causes a rise in price above the long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio of 20% or higher.
In contrast, a buyer’s market is when there are more homes for sale than there are buyers. As a result, prices typically either decrease or increase at a pace below the average rate of inflation. A buyer’s market occurs when the sales-to-active listings ratio dips below 12%.
A balanced market occurs when supply and demand are about the same, with home prices rising in line with long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio between 12% and 20%.
Over a sustained period of time:
a seller’s market is represented by a ratio of 20% or higher
a buyer’s market is represented by a ratio of 11% or lower
a balanced market rests between 12-19%
Check out the trend for the eighteen months for West Vancouver and North Vancouver Sales-To-Active Listings Ratio (SAR) for all three property types (Detached Homes, Apartments and Townhomes):
WEST VANCOUVER HOMES
WEST VANCOUVER APARTMENTS
WEST VANCOUVER TOWNHOMES
NORTH VANCOUVER HOMES
NORTH VANCOUVER APARTMENTS
NORTH VANCOUVER TOWNHOMES