FRASER VALLEY REAL ESTATE REPORT: SEPTEMBER 2023
Observations, Opinions, Trends and Analysis of Suburban Vancouver BC Housing Markets
Introduction
August was the unofficial end of summer and saw a typical lull in real estate market activity in the Fraser Valley. August tends to be a slower time in the real estate market, with many people enjoying their final days of summer holidays. Real estate is not top of mind for many people in light of this. Still, below are my key takeaways from residential real estate activity in the Fraser Valley, for August 2023.
The Market Backdrop
In early September 2023 we saw the Bank of Canada leave it’s benchmark interest rate at 5.00%. The BOC left open the possibility of further interest rate increases, but many economists have been suggesting that this is probably the end of this interest rate hiking cycle.
Given the above, there may be more clarity and predictability that benchmark interest rates may stabilize in and around current levels, at least in the short-term.
The media reported that the federal government had undercounted population growth in the past couple of years by about 1 million people! It is no surprise then that there is a high demand for and shortage of rental units. This is increasingly pressuring rents up.
What Stood Out to Me in August 2023
Sales numbers were down from July by 7%
The days on market to sell a home was still quite low: 25 days for detached houses, 16 days for townhomes and 20 days for apartments. This means there is still steady demand for homes.
The sales-to-active listings ratio overall was 20% indicating a balanced market for the housing market as a whole. For the three main property types, the ratio was 16% for detached houses, 38% for townhomes and 32% for condo apartments. Fraser Valley townhomes continue to be in high demand and have been selling fast.
My Take on the Current Housing Market
There remains a steady demand from homebuyers in the marketplace. It shows the resiliency of this market, despite a higher and more normalized interest rate environment. Strong population growth in the Metro Vancouver and Fraser Valley area is also putting upward pressure on both rental rates and home prices, I believe.
There may be a gradual increase in new listings coming to market if and as people face mortgage renewals at mortgage rates they cannot financially handle. Interest rate increases work with a rolling lag in relation to the impact on homeowners with mortgages. As some people struggle keeping up with higher mortgage payments, we will likely see more homeowners forced to list and sell their Fraser Valley home.
What I’m Watching in the Months Ahead
It may be the case that the Bank of Canada stays on pause with it’s interest rate increases. Their next scheduled interest rate announcement will be in October. At that time, we should have more certainty around whether or not this interest rate hiking cycle is actually over or not.
Inventory levels of active listings remain modest but slightly increasing. If the level of distressed sellers putting their homes up for sale increases, that could be a negative influence on prices. So far the banks have been flexible around negative amortizations and trigger rates. Will that continue to be the case though?
The unemployment rate remains very low and the labour market still seems good. In this context, will the recession that so many economists predict is coming later this year be short or shallow? Will there even be a recession? Looking at jobs numbers will give us a clue.
Home Prices Across the Fraser Valley
Housing Market Update by City
North Delta & Surrey Central Housing Market
North Surrey & Cloverdale Housing Market
South Surrey, White Rock & Langley Housing
Abbotsford & Mission Housing Market Activity
Disclaimer:
This publication is not intended to cause or induce breach of existing agency agreements.
The views contained within are my own and not those of any organizations I may be affiliated with.
Statistical data is deemed accurate as of the date of publication and based on available board information at that time. Please verify accuracy of stats independently, if deemed important.
This newsletter is not for investment advice and only reflects my observations. Please seek qualified professional advice, before making any disposition or acquisition decisions.