The days are clearly getting shorter and darker, it’s hard to ignore we are heading into winter and what’s typically the slowest real estate season in Squamish. Despite real estate activity slowing down in winter, it actually proves to be a good time of year to buy and sell, depending on your position and what forecasts you listen to about the year to come.
As I discussed in last month’s market update, as of January 1st a new stress test comes into affect which will require borrowers of uninsured mortgages (mortgages with more than 20 percent down-payment) to qualify at higher rates. This will affect affordability and could possibly slow down the real estate market this spring.
The changes could actually have an opposite affect in Squamish, as buyers in Vancouver are now unable to afford what they were in 2017, thus seeking more affordable options nearby. Regardless of what happens in the New Year, there are some trends that characterize the winter real estate market here in Squamish, and what makes it an ideal time to buy or sell despite the stigma of a slow period. Here they are…
Sales slow in December and January
January is historically the slowest month of the year for sales, followed by December. The market picks up quickly in February so January is a great month to get the home ready for sale, and listed for the Spring market.
New listings taper off before Christmas
December is traditionally the slowest month for new listings on the market, for buyers this means not a lot of activity however when something does get listed it tends to get a lot of attention, and properties that have been on the market all Fall can often be negotiated down in price. Sellers may not need to compete with flurries of new listings this time of the year, and new listings are often met with eager and qualified buyers (especially this year, with many buyers worried about what the new stress test and what it will do to affordability come January).
Prices continue to climb despite winter
Median sales prices are continuing on an upwards trajectory, and seasonality does not affect this. Although prices tend to make their biggest jump in the spring, prices in winter are still stronger than fall and summer. For example, this year prices have increased 7.5 percent between June and October, and the biggest jump in median sales price happened between September and October alone. We are seeing this consistent trend across all property types.
Best time of year for buyers
The sales-to-active ratio, known as the market absorption rate which signifies whether it is a buyer’s or seller’s market, is tipped in favour of buyers during the winter months. The only time of the year in the last three years that the market was considered ‘balanced’ or slightly in favor of buyers was between October and January. A balanced market is considered when the ratio is under .20 (anything above is a seller’s market). We are consistently seeing the trend of a balanced market during winter months then spiking to a seller’s market after February.
So far for the month of November we’ve had 34 new listings, 19 price changes and 26 sales.
Squamish is still more in-demand than ever with lots of thirsty buyers looking for that perfect property to come on the market. For buyer’s nervous about the new stress test, now is the time to buy without having to qualify at higher mortgage rates. Sellers, there are plenty of qualified buyers ready to go, waiting for the perfect home to appear. Don’t let the slow stigma of winter prevent you from taking real estate action this season.