October sales in the Fraser Valley were off 18% from October of 2020. Will this push prices down?
No, prices are not expected to decrease as the number of new listings received in October dropped a stunning 29% from last year. The total inventory of active listings on the Fraser Valley Real Estate Board MLS is 50% of last year’s inventory. We need more housing – it’s that simple.
The Fraser Valley Real Estate Board saw 974 sales in January, a 24.2% cent increase compared to 784 in January 2019.
Active listings in the Fraser Valley MLS totaled 5,143 at the end of January 2020, a decrease of 14.2% from the same time last year.
The above graph shows the growth in prices for single family homes (houses) since January of 2012. The red circles indicate the introduction of the 15% Foreign Buyers Tax in Vancouver and most of the Fraser Valley (August 2016) and then in Ontario (April 2017). As you can see Vancouver and Fraser Valley sales have surpassed the pre Foreign Buyers tax peak but Toronto has not.
This graph shows that the Foreign Buyers Tax had less effect on Vancouver apartments and little or now impact on Fraser Valley apartments. Toronto apartment prices appear to have stalled.
This graph focuses exclusively on the Fraser Valley and indicates the increased values of apartments vs houses vs town houses. As you can see house and town houses (to a lesser extent) prices appear to be leveling off while apartment prices are on fire.
The Fraser Valley condo market makes me nervous from the Buyer’s perspective.
“Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities … will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands.” Warren Buffett – Berkshire Hathaway
This chart shows the sales of detached homes (houses) in the Fraser Valley and in Abbotsford during the first 20 weeks of 2016 and 2017.
As you can see the number of units sold is off slightly. There is one dramatic dip indicated during week 13 of 2016. This reflects the media storm generated by the bad practices of a few bad apples practicing in the Greater Vancouver market. As a result Christy Clark vowed to crack down on “shadow-flipping” and began an investigation into industry practices. The short duration of the market pause shows the resilience of the region’s market.
MLS stats show that February 2017 saw a 41% decline in sales vs February 2016 (1,396 in 2017 vs 2,387 in 2016).
Is it time to panic as a seller or the time to celebrate as a buyer? The impact of a significant decline in demand (buyers) is being lessened by an offset in the amount of supply (sellers). February 2016 saw 34% more new listings hit the market than February 2017 (2,171 in 2017 vs 3,283 in 2016).
What’s the bottom line?
Data for the Fraser Valley shows that prices for all product types (houses, condos & townhouses) remain significantly higher than a year ago. We have seen a small decline in the value of detached homes (houses) while condos and townhouses are stable or inching upwards.
As always I caution the reader not to make decisions based entirely on these statistics as they reflect the Fraser Valley in it’s entirety and regional differences are sure to exist. Speak with an expert, someone with experience and knowledge in your region before you jump to false conclusions.