Listings are declining as expected for seasonal reasons as sellers anticipate buyers to be awaiting the spring before restarting their property searches
The Two Minute Market Update is intended to keep readers apprised of what’s going on in local real estate markets and in the global financial markets that affect real estate via inflation, interest rates, capital flows and public policy. It is best suited for those not able to keep up with all the news every day, but still wanting to be informed.
Two Minute Market Update, December 4th, 2024
Greater Vancouver real estate stats were released showing a continuation of the increased sales pace of October, although only by virtue of pricing remaining competitive on the properties actually selling. Prices were mostly unchanged from those in October. Listings are declining as expected for seasonal reasons as sellers anticipate buyers to be awaiting the spring before restarting their property searches. This may be misguided, however, as fixed interest rates have been backing upward again. Proactive buyers that have secured a rate hold may have a timeline to buy a property before they need to requalify at higher rates. General sentiment is that rates will continue falling as the central bank cuts on December 11th and January 29th; that buyer’s purchasing power will be better in the spring than now. But bond markets (which flow directly to fixed rates) are telling a different story.
A key employment data point will be released on Friday which will help to inform the Bank of Canada on the magnitude of next week’s cut. Any unexpected weakness or strength could impact the forward guidance given and will impact the bond markets accordingly. Similar can be said about the US employment and inflation readings that are upcoming. Markets are looking for confirming or dis-confirming evidence that President-elect Trump’s policy intentions will have inflationary impacts.
Stock markets have continued their winning streaks by achieving new all-time highs primarily due to “re-rotation” of liquidity into the big tech darlings like Apple, Amazon, Meta, Nvidia, Tesla and others. In our September 24th note, we suggested this would probably be necessary to get the S&P 500 over the 6000 mark. It appears to be playing out. Consumers exceeded expectations with their purchases on Black Friday and Cyber Monday. As long as they don’t slow down with in-store purchases ahead of the holidays, equities will be benefiting from the earnings bump that will be expected for Q4.
Bitcoin is consolidating previous gains by hanging out in the mid $90,000 range. ETFs and Microstrategy continue to gobble up significant volumes of available supply. That supply is mostly coming from more recent holders of supply purchased before the November election and taking quick profits. As that exhausts itself, further price increases into year end are likely if not inevitable unless some catalyst presents itself to deter risk taking. Gold prices are still off from their highs and underperforming along with most other commodities. Oil is trading on Middle East news of ceasefires and broken ceasefires it still goes for around $70/barrel. Investors in the natural resource sectors are getting left behind by a world that is orienting more and more of its human and physical capital toward the digital world. Timing a change in that trend has been a bad investing hypothesis for a long time and it may continue indefinitely.
Matthew Stiles
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Disclaimer: The information provided in this column is for general informational purposes only and does not constitute financial, investment, or other professional advice. While I strive to provide accurate and up-to-date information, I make no warranties or representations as to its accuracy, completeness, or reliability. Any actions taken based on this information are at your own risk. Always consult with a qualified financial advisor before making any investment decisions.