Halloween’s coming, and Real Estate in the Fraser Valley is looking a little scarrrry. We are back with your Fraser Valley Real Estate market update for October 2024 to peel back some of the fog.
Sales are down again, inventory is up again, the feds are throwing everything at the wall to kickstart their image, and bond yields are jumping, which doesn’t bode well for fixed rate drops. But variable will likely drop another quarter point, so that’s a silver lining, right?
Despite 3 consecutive rate cuts, active inventories have hit levels not seen in 10 years and sales are 30% below the 10-year average. Fraser Valley real estate is building towards a buyer’s market if sales continue to lag.
The Fraser Valley Real Estate Board recorded 982 sales in September, down by 8% over August and by more than 10% over September 2023. Again, seasonally adjusted sales were the second slowest in a decade in the Fraser Valley.
New listings rose in September, up 21% to 3,352, an increase of 17% year-over-year. This was what I had expected to happen, and you’ll recall last month that I had mentioned a lot of sellers were waiting for the Fall season to either list, or to reset and reposition their active listings that weren’t selling.
We saw a spike in failed listings as a result. Failed listings are any that come off the market without selling. Sometimes expiring, but more often than not terminated as they either adjust the listing, usually price, and then put it back on the market. Overall inventory increased 5% from August to September to 9,045, up 39% over last year.
While some of those listings found success, by and large the sales ratios continue to trend down, and the combination of declining sales and rising inventories has helped to create balanced, and in many cases, buyers’, market conditions in the Fraser Valley.
Detached homes are having the most trouble at the moment, with basically every area deep in buyer’s market territory. Slide 31 & Slide 34 For instance, White Rock and Surrey Central detached market saw an only 5% Sell Through Rate in September. So if you’re trying to sell detached in those areas, you have to really stand out.
Attached homes are faring better overall, largely due to them being more affordable. If you’d like more in depth information, check out the market areas page, and I’m always happy to dig into it with you as well to try and determine where you stand in any particular area, whether you’re looking to buy or sell.
Across the Fraser Valley in September, the average number of days to sell increased again, with a single-family detached home taking 35 days, while for a condo it was 37. Townhomes took, on average, 30 days to sell.
Benchmark prices in the Fraser Valley dipped again in September, with the composite Benchmark price down 1.4% to $978,800. This is the largest month over month drop we’ve seen in quite some time.
Taking a look at Benchmark Price Activity
- Single Family Detached fell to $1,501,100, down 1.5% compared to August 2024 and down 1.3% compared to September 2023.
- Townhomes fell to $834,400, down 1.4% compared to August 2024 and down 1.6% compared to September 2023.
- Apartments fell to $545,000, down 0.2% compared to August 2024 and ,oddly enough, increased 0.4% compared to September 2023.
There were a few markets that saw minor increases in benchmark pricing: Maple Ridge townhomes and condos, White Rock Condos, Surrey Central condos, New West Condos (You see a trend emerging?), but for the most part HPI was down again across the board.
Affordability continues to be the driving factor in sales, and the high rate, high price, high inflation combo, while improving, is going to be an issue for a while longer. I still believe we’ll reach an inflection point sometime inside the next 6 months, but when you’re sitting on the market trying to sell, that can feel like a lifetime.
5 Year Bond Yield It doesn’t look like there will be much relief of fixed rates in the short term either, as 5 year bond yields have spiked recently. It’s not due to any positive economic data on this side of the border, so my guess is that it’s following the US yield curve, as it spikes on better than expected job numbers.
We are expecting another quarter point drop at the next variable rate announcement, scheduled for October 23rd, but variable rates are still quite a bit higher than the lowest fixed product currently offered, so fixed are still the go to option for most. That being said, I think there’s likely an opportunity to make long term plays as prices fall in the short term, knowing that we’ve got a ways to go on rate drops overall, and once they get low enough, prices will climb.
The question is when and how much, but investors, at least the most aggressive/progressive, already seem to be sniffing around the edges. I participated in a presale event in Abbotsford last week that sold out its first phase in about 24 hours, and according to reps there, it was mostly investment activity. Reach out to be kept in the loop about presale opportunities in your area.
In other news, and for anyone not following the political rat race, the Federal Government is trying desperately to kickstart sales and get any kind of win they can, as they’re currently polling in 4th position. There were 3 major announcements made in the last couple of weeks that go into effect in December.
The most recent was the removal of the stress test on renewals. I’m pretty ambivalent to this one, if someone was already paying their mortgage for 5 years or so, they shouldn’t have to jump through hoops to keep their home.
The other 2, I’m not a fan of though. Namely the increase of CMHC insurable mortgage limits from $1 million to $1.5 million, and new ability for first time buyers and those buying new construction to opt for a 30 year mortgage, rather than 25. Basically it’s allowing Canadians to spend more and take on more debt, while benefiting banks and tax collectors, without solving the core issues that lead us to where we are in the first place.
Housing Starts Down Despite promises to build 4 million new homes, recent reports highlight that housing starts were down by 30,000 last year due to high rates. So we aren’t moving in the right direction.
I get into it in more depth here.
But that’s just my opinion, I’d love to hear yours. Do you think the bottom of the market is nearing, or are we a ways away yet? Do you think the first time buyer amortization and CMHC changes are a boon or a bane to Canadian consumers? Let me know your thoughts.
And as always, if you have any questions, all things Fraser Valley Real Estate, whether that’s buying, selling, or investing, don’t hesitate to reach out.
