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 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