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, July 2nd, 2024
New listings of single family homes in North Vancouver accelerated in the 3rd week of June, but moderated in the 4th. Sales are not generally keeping pace. Where sellers are finding buyers are either with properties priced as bargains, such as fully updated homes in the sub $2.5M category, or by offering substantial discounts to list price. The remaining sellers appear content to wait out the summer hoping for buying power increases through lower mortgage rates to eventually meet their desired price floors. We will await official numbers from the GVRD in our next update.
Mortgage rates popped up again after a higher than expected inflation number was released by Stats Can. These sorts of aberrations are normal when measuring a trend like the downward drift of inflation data since November, 2022. As long as that trend doesn’t reverse further, markets do expect another rate cut at the July 24th Bank of Canada meeting.
US rates and economic data are undergoing a bit of a repricing based on the political calculus ahead of the November elections. Politics is usually not very determinative of economic data, so any larger movements should probably be looked at as an exaggeration and will be corrected. One wildcard to keep an eye on is the persistent weakness in the Japanese Yen. As a key component of the western global financial system, any further schisms in that market could begin to have domino effects elsewhere, specifically in the US. Conversely, Japanese policy changes that get the situation under control could ease pressures and provide the Federal Reserve with grounds for rate cuts.
Stocks are entering the typically quiet summer period with decreased volatility. For markets that are already in strong uptrends (not to mention a presidential election year), this is a recipe for more new all-time highs. It is also a market increasingly priced for perfection, so any external shock (like a negative earnings report from one of the market leaders) is prone to a sudden repricing.
The aforementioned “froth” in crypto markets was purged, sending bitcoin prices lower by 10%. Commodities are still quiet in general, which is surprising to many. Related stocks and the resource-heavy Canadian junior stock indices have been quiet for so long that they’re mostly forgotten about.
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.