lack of listings leads to competition in the fraser valley
The Spring market in the Fraser Valley is shifting into first gear, with total sales last month up 46% from the previous month!? Unfortunately, that’s historically 51% less year over year. In fact, it’s the least volume since February of the 2009 recession. The median sale price in the Fraser Valley was $973,000 up from $954,000 last month.
“A slowing economy and still elevated mortgage rates are expected to keep housing activity lower than normal through much of 2023” – BC Real Estate Association
Fortunately, the prices have remained strong so far in 2023 but It’s yet to be determined how many gears our Spring market has.
We had the least amount of sales volume for February since 2009.
We had the least amount of new listings for February since our real estate board started keeping statistics in 2005.
According to data from the Mortgage Bankers Association, mortgage applications have dropped to their lowest numbers in 28 years as rates continue to rise.
While mortgage applications are still historically low, we’re still seeing more Buyers than Sellers, and that’s what’s keeping prices stable or, in some cases, even leading to multiple offers! This could quickly change if more Sellers decide to brave the market.
If you went to a food truck festival and surprise! There was only one vendor; you bet that vendor would be busy no matter what they were selling. Even if attendance at the festival was the lowest since 2009, that vendor would still feel their business take off. Multiple offers on fries! Hamburger’s selling for $20! Prices are based on supply and demand, and when both the supply and demand are uncommonly low, then that ratio can be quickly influenced by smaller amounts of change. A few more food trucks roll up and suddenly, prices need to adjust, and the offering quickly changes.
It seems that the Bank of Canada will hold rates around their current level, even with the FED looking to raise rates further. I gather it’s because, in America, the terms for mortgages are long term so the interest rise has been tougher and more immediate on us than on our American counterparts. The Bank of Canada said the rise in interest rates has weighed on business investment and household spending. Our inflationary numbers have been in lockstep with the Americans and when they raise rates and we continue to decline to follow, then it’s fair to reason that our inflation numbers will be higher for longer and could lead to a weaker Canadian dollar.
The low volume caused by both the low mortgage applications and the lack of new listings is here to stay until our mortgage rates return to a more comfortable level or our home prices drop. It seems that our mortgage rates won’t be dropping in the immediate future unless we can tackle inflation quicker than expected. New listings will most likely remain low because I believe sellers will choose to suffer through high mortgage payments for years before they would realize a loss on their home, and in many cases, sellers can’t afford to sell much lower as the market has dropped back to Summer 2021 prices.
Sooo… low volume, stable-ish prices.
As a Buyer, we recommend you show patience with the lack of inventory and if the interest rates start rising further, you may see an opportunity. This is a great time to take
your time and understand the community and the neighbourhood you’re buying into.
As a Seller, we are currently seeing multiple offers and some properties are fetching great prices. This could change quickly if more vendors show up!
P.S. I’m sorry these market updates have been depressing lately. I’ve thought I’ll add inspirational music to the end so we can finish on a high.
P.S.S. Every situation is different and I would be more than happy to discuss how this all affects/effects you or doesn’t!