Will the langley real estate market bounce back in spring?
Happy December! I can’t believe Christmas is a few weeks away; my kids are still eating Halloween candy. This sugar high is never going to end. Before we wrap up all the Christmas presents, let’s wrap up our last market update of the year!
“With continued high-interest rates and what looks like a difficult 2023 ahead for the Canadian economy, we anticipate that market activity is going to fall below normal levels next year.” – BC Real Estate Association.
We speak to many homeowners and realtors hoping for a hectic Spring with prices bouncing back. Our team would love prices to flatten out so the consumer can move without the fear of our frantic market.
However, heading into Spring, there are some significant factors that Buyers and Sellers need to be aware of:
• There were 3948 active listings last month, a 97% increase from the previous year’s 2008 active listings. This means we are heading into Spring with twice the inventory we had last year.
• Even with twice the amount of active listings, we still saw a decrease of 59% in sales for November year over year.
• Median prices have dropped considerably in the 3rd and 4th quarters of 2022; however, much of that drop is caused by a frozen high-end market. If urgency returns to the higher-priced homes and they adjust their prices more aggressively, then it will surely drive down the prices of the mid-range and low-end homes.
• Bank of Canada raised the rates again today by 0.5% and risks taking even more of the wind out of a market that is desperate for air.
• Word on the street is there are more homes pending hitting the market this Spring than in recent history, with fewer Buyers able to qualify.
• Many of our local investors were buying in the last few years with the equity they gained through the meteoric rise of our property values. Many of these investors have seen their payments rise to levels that no longer pay down equity. We predict many of these investors will be selling their properties without new investors to fill in.
• As of January 2023, the estimated 465,000 foreigners coming to Canada next year will be banned from buying homes in Canada for two years through the Prohibition on the Purchase of Residential Property by Non-Canadians Act or commonly referred to as PPRPNCA for short.
The market has proven to shift quickly, so if we see an end to the war, an interest rate cut or an unforeseeable amount of Buyers enter the market, our advice could change.
We suggest our Buyers continue to show patience to find the property that fits their family while paying particular attention to their rate holds. We don’t recommend our Buyers wait unnecessarily, as interest rates will eventually return to a more reasonable level, and rental rates are rising faster than the market is dropping. Rental rates are projected to continue to increase through 2023.
For Sellers, we suggest planning a strategy that exposes your property to the most Buyers with the least competition and adjusting to feedback as needed. Many of our clients are wisely planning for a January / February sale with the hopes to be shopping in the Spring. The volume in our market is very much property type and price specific so if you’re looking to move in 2023, let’s meet soon for a catered plan for your family and property.
– Mike Cook