One of the most common questions I get is where is the safest area to buy?
Please note that this blog post refers to safest financially speaking, not safest as in lowest crime.
Across the board, the condo market is far safer financially than the detached market. Within the condo market, there are better and worse places to buy than others. I've identified a few of the safest bets using the sales-to-active-listings ratio. Right now the stats show the safest bets are New West, Port Moody, Port Coquitlam, and Downtown VE (Gastown/Railtown/Chinatown).
An explanation of the sales-to-active-listings ratio from the REBGV.
A seller’s market is when there are more people looking to buy then there are homes available. This causes a rise in price above the long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio of 20% or higher.
In contrast, a buyer’s market is when there are many more homes for sale than there are buyers. As a result, prices increase slower than the long-term average rate of inflation. In extreme circumstances this can cause prices to decline. Typically this is indicated by a sales-to-active listings ratio below 12%.
A balanced market occurs when supply and demand are about the same, with home prices rising in line with long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio between 12% and 20%.
Over a sustained period of time:
- a seller's market is represented by a ratio of 20% or higher
- a buyer's market is represented by a ratio of 11% or lower
- a balanced market rests between 12-19%