Sunday, January 17, 2010

Greater Vancouver Real Estate - Supply & Demand

A few months ago, "Housing Analysis" posted some very interesting data on the supply and demand for homes in Greater Vancouver. The period covered was from January 2005 to October, 2009. View the link here>.

The average monthly sales for 2005, 2006 and 2007 was around 3,500 units, with seasonal higher sales from April to July and the lowest level of sales around December and January. The average listings was around 10,000 to 12,500 homes. The MOI chart showed that during the above 3-year period, the inventory was fluctuating around 4 to 5 months of suplly.

Months of inventory

A balance market is generally when there are around 6 months supply of homes. When the "months of inventory" (MOI) is above 6, home prices tend to fall. When the MOI is below 6, the market is bullish and home prices tend to go up. From May 2008 to March 2009, the MOI exceeded 6, and home prices fell. When the MOI fell below 6 in April 2009, home prices rebounded.

The Greater Vancouver real estate price chart below is seen to confirm the strength or weakness in the housing market.

View Vancouver homes for sale.

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