The same old song & dance; historically low supply levels with high sales activity. Currently, the number of sales are 30% above average levels. Persistent demand and lack of supply continues to put upward pressure on prices across all levels of homes in the Fraser Valley.
Over the last 5 years, the price for a typical detached home in the Fraser Valley has increased 50%. While the government has tried to step in to improve housing affordability, with the 2016 foreign buyers tax followed by the 2018 stress test, I feel the real issue behind BC’s hot housing market is the lack of supply available to consumers.
More recently, the government is talking about implementing a capital gains tax on principal residencies. While this may have a short term cooling effect on the market like the other programs did, I struggle to see how it will solve the supply problems. If anything, wouldn’t this prolong or even prevent some people from listing their homes to avoid tax, making supply levels even worse?
To understand how strong of a sellers market we are experiencing, I find it helpful to look at the Sales-to-Active listing ratio. For the month of August, the sales-to-active listing ratio for townhomes was 94%. This means that if we had 100 townhomes in the Fraser Valley to sell in August, 94 would have sold. To bring this into perspective, sales-to-active listing ratio’s above 20% are considered a sellers market. Detached homes are sitting at a sales-to-active listings ratio of 55% and Condo’s are at 66%.
While all of this sounds great if you are a seller, you better have a plan and strategy in place before listing your home for sale, or this process could be extremely stressful.
The same goes for Buyers; it is now more important than ever to have a reputable mortgage broker and Realtor in your corner. Ones who can put together a strategy that provides you with a strong chance of securing a home you want, while also making sure it is safe and in your best interest.
The Inside Scoop
I was touring homes this past weekend with 3 different sets of buyers. One set was looking for a condo, the second set, a townhome and the third set, a detached home.
With each set of buyers, I was required to book 15 minute showing time slots and wait until it was our turn to tour the property – currently, only one group is allowed in a home at one time.
I expected wait times with the detached home buyers, but I have never seen such consistent demand across all three levels of properties; condos, townhomes and detached. My townhome and condo buyers were also required to wait until it was our turn to view the property.
Historically, a detached home is in highest demand. However, circling back to the sales-to-active listing ratios, demand is ranking Townhouse as #1 most competitive, Condos as #2 and detached earning a bronze as #3. I am curious to know if this is because people are getting priced out of the detached market, or if new buyers are entering the market and just starting out!
Full stats package here.
- MLS® HPI Benchmark Price Activity
- Single Family Detached: At $1,336,800, the Benchmark price for an FVREB single-family detached home increased 1.3 per cent compared to July 2021 and increased 31.1 per cent compared to August 2020.
- Townhomes:At $697,500, the Benchmark price for an FVREB townhome increased 1.3 per cent compared to July 2021 and increased 23.7 per cent compared to August 2020.
- Apartments:At $498,800, the Benchmark price for an FVREB apartment/condo increased 1.0 per cent compared to July 2021 and increased 14.1 per cent compared to August 2020.