FRASER VALLEY REAL ESTATE REPORT: AUGUST 2023
Observations, Opinions, Trends and Analysis of the Housing Market
Introduction
I hope you are enjoying your summer. July tends to be a slower time in the real estate market, with many people getting away or just staying local to enjoy summer holidays. July is always the month that we really appreciate the incredible beauty that British Columbia has to offer it’s residents. Here in Metro Vancouver and the Fraser Valley, that is especially true, with the endless outdoor recreational opportunities afforded to us. The stunning natural beauty of the place we call home is second to none in my opinion. I am blessed to call the Vancouver area home.
With the above in mind, a lull in sales activity is not unusual as residents take time out to play, travel and get together with family and friends. Real estate is not top of mind for many people in light of this. Still, below are my key takeaways from real estate activity in the Fraser Valley, for July 2023.
The Market Backdrop
In July 2023 we saw the Bank of Canada increase it’s benchmark interest rate by 0.25% to 5.00%. This is the highest interest rate in 21 years. It is said that interest rate increases work with a lag of 12-18 months, typically. So far the market has been resilient, but, that may be tested as more and more people renew their mortgages at higher mortgage rates.
What Stood Out to Me in July 2023
Sales numbers were down from June by 29%
The days on market to sell a home was still quite low: 22 days for detached houses, 16 days for townhomes and 18 days for apartments
The sales to active listings ratio overall was 22% indicating a seller’s market. For the three main property types, the ratio was 17% for detached houses, 45% for townhomes and 36% 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.
If there is not a significant uptick in properties for sale, then I could envision a fairly steady housing market, that might maintain a balanced equilibrium. A sideways market would be healthy for both buyers and sellers, if there was some predictability that mortgage rates have largely plateaued and prices were steady.
What I’m Watching in the Months Ahead
It may be the case that the Bank of Canada goes on pause with it’s interest rate increases. Their next scheduled interest rate announcement will be in September. At that time, we should have more clarity around whether or not this interest rate hiking cycle is over or not.
Inventory levels of active listings remain modest. 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 robust. 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
Surrey-North & Surrey-Cloverdale
South Surrey/White Rock & Langley
Abbotsford & Mission
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.