Typically, this time of year we start to see sales decline as the weather changes and we enter into the holiday season. However, this year has saw quite the opposite with November 2021 recording the region’s second-highest volume of sales of all property types for the month – second only to November 2020!
Lack of supply continues to be the biggest factor impacting the market. That said, I also wonder if the buzz around interest rates rising over the next few months has also played a factor in the surge of demand seen across the valley. Perhaps buyers are trying to maximize their buying power prior to rate increases in order to qualify for more house!
For example, a $600,000 mortgage at a rate of 1.5% is cheaper month to month when comparing it to a $500,000 mortgage at 3.5% interest rate. So, even if home prices were to come down when rates eventually go up, it’s unlikely they’ll become more affordable.
We are still seeing multiple offers across all type of homes, including detached, townhomes and condo purchases. For the majority, sale prices greatly exceed listing prices. When looking at all types of housing in the entire Fraser Valley, there is only 1.5 months of inventory available, making it a strong sellers market.
Heading into the new year, I do not foresee a decline in the demand, simply because I am still seeing so much demand in what is usually the slowest time of the year. Even if rates do go up, they will go up gradually and not enough to put a full halt on the market. If anything, I believe price points will stay strong and the amount of offers per unit may become less as some buyers may get priced out of the market, or get fatigued by the competitive market conditions.
Benchmark Pricing Across the Fraser Valley:
- Single Family Detached: At $1,448,000 the Benchmark price for a single family detached home in the Fraser Valley increased 3.7 per cent compared to October and, increased 36.4 per cent compared to November 2020.
- Townhomes: At $740,100, the Benchmark price for a townhome in the Fraser Valley increased 2.7 per cent compared to October and increased 29.8 per cent compared to November 2020.
- Apartments: At $530,400, the Benchmark price for apartments/condos in the Fraser Valley increased by 3.2 per cent compared to October and increased 21.7 per cent compared to November 2020.