There is currently a lack of supply of active listings of homes for sale, to meet what feels like insatiable demand. I've been thinking about why people may be hesitant to list their homes for sale, especially detached homes.
It's my theory that:
1) People are seeing and anticipating that the trend of rapid monthly price esclation will continue. This means that they are seeing the value of their home go up month after month after month, in big sums. Some potential vendors may be sitting back and just watching their equity go up in value, in relatively easy fashion. This might cause a reluctance to sell, if a homeowner expects prices to just keep going up.
2) COVID-19 - it would be natural for some people to not be comfortable inviting strangers (i.e. buyers) into their home. Older people tend to own a high percentage of the detached homes. And this cohort is at a higher risk to COVID, because age is a risk factor in how sick a person can get from the virus. So in turn, it may be the case that some of our older, otherwise would-be sellers, are holding off on listing and selling their place. Perhaps we will see more listings hit the market once the pandemic recedes.
3) The nesting instinct - related to #2, many people still may be feeling a need to hunker down as virus variants take hold over communities. People may be feeling more secure by staying put until such time as the pandemic dissapates and a full re-opening of society and the economy can take hold, without restrictions.
I'm sure there are other factors that might be in play when it comes to why the supply of homes for sale haven't been able to keep pace with demand. Perhaps cheap money in the form of low mortgage rates is pulling demand forward from the future? Maybe potential sellers are looking around and fearful to sell their place because they don't know where they would move to after selling? In other words, after selling, they would be in the position of having to buy back into a market with limited inventory.
2022 is shaping up to be another interesting year in the Fraser Valley housing market.