Fraser Valley Real Estate Market Update: June 2023 Unquenchable thirst for real estate

lack of listings leads to competition in the fraser valley

Staging an early recovery, home sales are returning to a normal pace well ahead of schedule despite rising interest rates.” – BC Real Estate Association

Total sales last month were 1722 up 49% from last June and 11% increase from the previous month. The median sale price was flat at $1.07M which is only a 1% increase from last year but a 1% decrease from the previous month. Active listings totalled 4018 down from 4388 the month before and 5136 from this time last year. 

On July 12, the Bank of Canada (BOC) raised its key interest rate to 5% (This increases most bank Prime rates to 7.20% from 6.95%), and it is likely we will see another rise come September 6. In January, when the BOC gave signs of positivity and paused interest rate hikes, we saw the real estate market explode from pent-up demand. I doubt we’ll see such hopeful messaging in the near future as Bank of Canada governor Tiff Macklem is now forecasting inflation to ease 6 months later than previously predicted (New estimated relief in the middle of 2025). On July 26, we’ll see if the US FED decides to increase interest rates like ours. Most analysts predict at least another 0.25% raise for our American counterparts.

Canada’s housing agency recently reported that 75% of Canada’s household debt comes from mortgages, and we now lead all G7 countries in household debt. Go Canada! The lower mainland may be feeling the pinch the most as we have some of the largest mortgages in North America, and we continue to have a thirst for real estate that refuses to be quenched based on our unending deficit of supply caused by the lack of new housing construction and massive immigration targets. 

It certainly feels like Canadians, especially local Canadians, are at their breaking point with these interest rates, and I would be surprised to see any big moves upward for pricing in the near future for the general market. We may see some pockets continue to be very competitive, but the general demand should level out again. I would be surprised to see large price drops because we still lack inventory, sellers aren’t in positions to take significant losses, and people aren’t finding better luck in the rental market. 
That said, we are still firmly in a Seller’s market especially for detached houses below $1.25M, townhomes below $1M and condos below $500k. 

If you’re looking to enter this market we suggest speaking with a mortgage broker (we know some of the best) to find out how much you qualify for and how those payments look. When you’re ready, we recommend patience to find a great home. This summer could be a great opportunity to find a home with less competition and more choices than Spring offered.

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Mike Cook
Mike Cook
A blue-collar worker in a white-collar world, I spent most of my twenties building high-end homes, leading major renovations, restoring, and finding/fixing deficiencies in new construction. I am happy to use this experience to point out the potential of a home. I pride myself on always looking for a way of improving the experience for my clients, agents on my team, and my community through leadership, technology, and charity.

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