Quote:
Originally Posted by scryer
The ad-hominem attack on my post really does speak to the kind of quality that I would expect someone to resort to when trying to deny the housing crisis:
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It's not meant as an ad hominem attack. I'm not denying the continued disconnect between average household wages and home purchase prices in the GVRD (Household income is however more than double what you suggested - The median total income for households in Metro Vancouver was $72,662 in 2015).
When you make comments like "I'm suppose to believe that there were hordes of Canadian citizens sitting on cash waiting conveniently to spend in July" and "the sudden surge in home purchases across the board just don't make no sense at all and I don't believe in coincidences when it comes to the RE industry." it suggests you believe that the reported sales numbers are wrong. That seems to suggest some sort of conspiracy involving the RE industry.
I'm suggesting that one month's slightly higher sales numbers after several months of low numbers are just the market playing 'catch up'. There were still fewer sales in the first 7 months of 2020 than any other year in the past 20 years - except in 2019, which saw a really low start to the year and then picked up again in the fall and winter.
Here's
an agent's take: "There’s truth to the pent-up demand story as buyers who normally would have pulled the trigger in the spring were pushed into the summer thanks to COVID. In fact, July was the busiest month of the year for home sales in 2020. It was also the busiest month so far for new listings. Realtors were run off their feet in July, in what is normally a slower time of the year. So yes, the spring market came unnaturally late this year, making it difficult to predict if this demand is sustainable as we move forward into the last part of 2020. The big driver of housing activity right now appears to be cheap credit and a desire to increase living standards as people spend more time at home."
Quote:
Originally Posted by scryer
Switching my tone: do you know for a fact that these buyers were selling a property, trading up, or downsizing (in Metro Van - yeah, right!)? You have to also remember that a lot of those homeowners in the REBGV area are also generational owners who pass down their homes downwards. And like you said, a lot of these owners would have received financial help from their family - again supporting the notion that Metro Van is unaffordable to the average person working a job that pays like 35k+.
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Just over 3,000 pre-owned homes were bought. First time buyers made up less than 10% of the market in 2018. [
source]. So most buyers already have a home somewhere, and logically the majority are selling in order to finance their purchase. (It doesn't seem logical in the present market that many sales of pre-owned homes are to speculators. Nobody's buying to rent on AirB&B). Of course some in Greater Vancouver are downsizing. House owners tend to be older. Some have to move to a care home. Some die. Some become widows, or widowers. Some retire and buy a smaller home in Parksville (for example). I know one family who sold their west-side house a few years ago, bought one on the east side (very slightly smaller) for half the cost, and two apartments, one for each of their 20-something kids. While those sorts of circumstances may have been impacted by the pandemic they haven't stopped.
I have friends who moved from the West End to a slightly smaller retirement apartment in White Rock, delaying their sale and purchase from April to July. I have neighbours who are trying to buy something with more space for their family, now the kids are growing older, so their house has come on the market. They'll take whatever capital they accumulated in their present house (probably at least $200,000 in the past three years) and the fact that interest rates are significantly lower than when they bought three years ago, and they'll be able to buy a more expensive home, even if their wages haven't changed.
Average incomes, or median incomes, and average or median house prices don't really explain the overall housing market activity, and certainly not in any one month.