The scenario that saw a Port Coquitlam home sell for more than $100,000 above the asking price may be taking place across Metro Vancouver as the region posted the highest number of April real estate sales in nearly a decade.
It's also a seller's market, according to the Real Estate Board of Greater Vancouver, because listings aren't keeping up with demand.
"The supply of homes for sale today in the region is not meeting the demand we're seeing from home buyers. This is putting upward pressure on prices, particularly in the detached home market," stated Darcy McLeod, REBGV president, in a press release.
BABY BOOMERS DOWNSIZING, HELPING THEIR KIDS BUY HOMES
Last month the Tri-City News reported that a four-bedroom, 2,100 square foot home on Wellington St. was on the market for $595,000, (most recently assessed at $559,000) and sold for $702,000.
The home drew multiple offers and many were subject free, and while that's not surprising given the upward pressure on prices, McLeod said people with a good realtor likely did their research ahead of time and the sale price may have been closer to what the home was worth, given the market, especially for homes under $800,000.
"There's a number of reasons that things are as busy as they are, historically low interest rates, high consumer confidence, certainly buyers seem to be quite confident that it's a great time to buy a home and it's a good long term investment," McLeod said in an interview with The News. "We're also seeing some shifts from the baby boomer generation. There's a lot of downsizing going on, there's a lot of earned equity being shared with children and grandchildren helping them get into the market. That's helping the first time buyer."
Another factor is migration to the region, which McLeod said is about 40,000 people a year.
As to why listings are down nearly 20% from last year, McLeod suggested that people may be motivated to sell but are holding on to their properties because they aren't certain they'll find another suitable property in which to move.
"It's kind of a chicken and egg scenario," he said, noting that the tight market is affecting potential sellers as well as buyers.
SELLERS IN THE DRIVER'S SEAT, BUT STILL BARGAINS TO BE HAD
But with fewer properties on the market compared to last year at this time, sellers are in the driver's seat but that doesn't mean homebuyers should roll over and play dead.
With careful research with the help of a real estate professional, McLeod said buyers can find the right home in the right neighborhood at the right price.
Last month a Vancity Savings report predicted that home prices will soar beyond affordability, even in cities currently less expensive, such as Port Coquitlam and New Westminster.
But McLeod said that report is not spurring people to buy, rather it's a feeling of confidence and certainty. At the same time, buyers are being judicious where they choose to live, especially if they're on a budget, working with a realtor to find the right property.
"I don't think that people are necessarily being priced out of the market; we are seeing a lot of young buyers moving to communities where they can afford to buy a detached house or they are choosing a different property type if they would rather live closer to the city."
PRICE INCREASES BY HOME TYPE
Price differences compared to 2014
Detached
Coquitlam up 12%
Port Coquitlam up 11.4%
Port Moody up 8.1%
Townhouse
Coquitlam up 5%
Port Coquitlam up 6.8%
Port Moody up 6.1%
Apartment
Coquitlam up 6.5%
Port Coquitlam up 2.2%
Port Moody up 9.3%
