Market update with Chief Economist, Brendon Ogmundson
Here is some timely advice from one of my office's mortgage agent, Danny Duong, after having a great conversation over email with BCREA's Chief Economist, Brendon Ogmundson. The Economist presented a market update at a Mortgage Broker's conference which outlined key trends/metrics that we should watch over the next few months.
Here is some of the highlights in my email exchange with Brendon Ogmundson below (shared with his permission):
"Hi Brendon...would it be fair to say then that it would be better for buyers (and realtors) to keep an eye on the average price or HPI to see if it flattens/stabilizes over the next 6 months instead of the y/y metric if they are trying to buy a home (all things equal interest rates, they can still afford it, etc)? Because if they look at the Y/Y metric then it would suggest the market is still spiraling downwards even though in reality prices have stabilize Jan to May?
"Hi Danny – I think a couple of charts can sum it up best (see below):
The average price for all of 2022 is going to be about $1.28m – part of the year was higher than that, part of the year lower. If prices just stay flat from November’s value of $1.2m, that will mean a 6% decline when we compare the annual average of 2023 vs 2022, even if the average price hasn’t changed at all. Because prices were so high to start 2022, we will see large year over year declines from January to May, again, even if prices are flat from where they end this year....
"Yes, I would put more weight on month-over-month trends right now. You can see that month-to-month changes in average prices are pretty noisy, but are also more timely. HPI smooths out the noise at the expense of somewhat lagging actual market conditions (as you can see in the chart, a 6-month trend of the Average Price looks a lot like the HPI) . However, both measures are pointing to some stability in recent months:"
If you have any questions in regards to this information, reach out to Danny for your mortgage needs. For your real estate needs, I am always a phone call away - Leanne at 778-549-8114