Our real estate boards new Director of Economics and Data Analytics when asked ‘In your opinion, what economic indicators are the most telling about what’s happening in the real estate market?’ Andrews Lis replied:
“I think most people would focus on average (or median) prices and sales volumes. We certainly see lots of discussion about it in the media.
But from my experience, I could probably tell you what’s happening to both prices and sales (and other indicators) by simply knowing the current and historical values of one single indicator: inventory.
If you look at real estate data for long enough, you’ll find that the one data series that contains a considerable amount of ‘predictive power’ is inventory. Low inventory scenarios are typically brought about by strong demand, which is typically synonymous with high sales volumes. Under these scenarios, prices tend to rise – sometimes dramatically, as we’ve seen in recent years.
The converse of this is generally true as well, with the caveat that prices tend to be much more ‘sticky’ downward than they are upward. But by knowing how much inventory there is online at any given time relative to the past, one can infer quite a lot about the current state of the market.”
Check out the trend of North Shore inventory levels for different property types over the years:
WEST VANCOUVER & NORTH VANCOUVER
HOMES
WEST VANCOUVER & NORTH VANCOUVER
APARTMENTS
WEST VANCOUVER & NORTH VANCOUVER
TOWNHOMES
Questions?
Reach out to [email protected]
