Here’s a rough transcript of our conversation about the upcoming 2021 Fraser Valley real estate market.
Rod: Hi everybody. Thanks for joining us. We’re getting a little (real estate) market update from Mike Wilson who is the publisher of Fraser Valley Lifestyle, but he also spends more of his time as a realtor in the Fraser Valley.
It’s crystal ball time. We do this a few times a year.
We get together online and try and ask you to look into your crystal ball. And look ahead as I, if I could just sum up my observation from the year, it sounds like, like from January, almost until May or June, it was a, it was a hot market and there were multiple offers and all that kind of stuff.
And then it just, it just died going into the summer, like just in terms of. Activity and you weren’t getting those multiple offer situations. So just looking back, is that a fair summation of the year? So far?
LOOKING BACK AT THE RECENT MARKET
[00:01:02] Mike: I think it really is. I mean, if you look at, and I’m going to, I have some statistical stuff, I’m just going to give some basic statistical.
So from January of 2018 through to July of 2021, we’ve had a 23% rise in actual listings. So there’s a big listing boost. What did that mean? Well, we started out that super hypermarket. We got into COVID after about six months, we didn’t have the supply. And so what happened is you, you had a huge disparity, you had far more pent-up energy.
That’s where the multiple offers came in. It had a little less supply, a lot more activity that we didn’t anticipate in before you knew you were at a, you know, we were at a depleted resource or the depleted listings what’s happening now. That happened through till to this point, right now we hit sort of the summertime.
So BC, historically, if you’re going to have a softer market, it’s going to be sort of the end of June through the end of August. And that’s a, I would draw a parallel. It doesn’t work that way through Canada, but with BC in particular, most people, you know, schools out, we have beautiful weather, beautiful scenery, lots of things to do in BC.
People do tend to take that time. So we do see a trend of that. If you’re going to see it. And we did see that this year, probably for some different reasons to add to the normal reasons, obviously COVID has presented challenges, as far as travel goes, we saw people still buying recreation vehicles and traveling within BC.
So there still was some travel which kept them going. The other thing that happened is we just simply had a marketplace where the prices were simply skyrocketing. People were in multiple offers. They weren’t getting in property, but now we’ve seen in the July markets where the balance of listings to sale ratio is balanced out much more.
What, what that did, was it allowed people to look at properties? A couple of times you’re still seeing great sales, but you had an opportunity to write on a property that you may have seen two or three times where previously during COVID. With the spike in the market. You, you know, you had to write an offer immediately and you were in a multiple scenarios now, are there still some multiple offers?
Yes, there are because we’re not getting a huge supply in all sectors. And so there are still the occasional multiple offers coming in on property, but for the most part, it’s settled in and certain components of the market. There’s more supply so there’s less of that happening. And that’s the summer market.
So a little bit more traditional. We have a little softening, although the market’s been strong enough, it certainly wasn’t comparable to the hyperinflated market that we had in the previous year. And I think that’s, that’s much healthier, obviously, you know, as a buyer, it’s a much healthier market as a seller.
You know, everybody wants to win the lottery. The reality though, is that when you’re selling and buying, there’s relativity that comes into play. So unless you are actually selling out of the market and not reinvesting this is a better market for you in that previous market. Yes. You would sell for a windfall, but you’d be back in the.
The position is a buyer was telling me when they were buying your home, you’d be in multiple scenarios. So much more level market in the summertime, I think for most places. And I’ve been in negotiating and we’ll see where the fall goes for supply. That will be interesting. Yeah.
CRYSTAL BALL TIME. WHAT’S GOING TO HAPPEN THIS FALL?
[00:04:23] Rod: So looking ahead, I know it’s impossible to know, especially with what’s going on in the world and we have an election happening and all kinds of stuff.
What, what are you seeing for the Fall (2021)?
[00:04:36] Mike: Well, you know, what, how do I come up with a, what am I, you know, how do I come up with my crystal ball? There are a few factors that I sort of throw into them. Some of them are intangible, so they’re not really trackable. Other things that we can do is we can look at CMHC reports and see where they’re trending as far as you know, more tracking.
So some of the things that CMHC is watching. We’re starting to see a little bit of a tickling up of the fixed, very fixed mortgage rates. So fixed mortgage rates have a direct bearing as far as affordability. And you know, a lot of buyers that are gotten into the market now have never been able to, they’ve never had to say the word 4%, you know, interest rate wise.
So you start to see interest rates climbing, which they could at some point. And that will have a direct bearing on the buying ability or the budget that’s available. The other thing that’s happened is with CMHC, with the affordability aspect, is there increased, they’ve increased the test, the stress test for buyers.
So that continues to be a bit of a challenge. So you’re sitting at over 5% stress test. So not everybody’s going to qualify for those funds. Now, when we talk about stress, it’s a whole other conversation. It’s a, it’s a test that you take. It doesn’t mean you have to take a 5% interest. But it is trying to slow down buyers from getting in over there.
And the other thing, that’s the component that is going to be interesting. There’s a couple of things that were coming. We were anticipating more foreign investments, so that could, you know, money coming out of the Asian markets. If it eases up with COVID with the rules that are in place, that’s one thing.
THE POTENTIAL IMPACT OF THE CANADIAN ELECTION
But the counterbalance to that now, And again, you mentioned we’re in an election month or whatever it is, you know, the Liberal government is proposing that they actually have more penalties and more restrictions on investment for non-residential primary residential. So what is that going to do? There keep the key theory is obviously is to make housing affordable for people who are actual residents.
So if the Liberal government gets in, we have that to consider, that’s going to shift the market a little. You’re going to take a buyer out of the market that would have been there. So, you know, there’s a number of variables. What’s the fourth wave you’re going to do. That’s a challenge to know. I think the fourth wave you know, it’s gonna be less of a challenge in the first three.
My hope is that I think we’ve gone a long way to getting protected from that. So that’s the hope. I would suggest that the. The other thing that comes in, which is always part of this is supply. So when we see some of these other things happening, the government protection, the interest rates will we see enough supply to satisfy the demand? Right now it’s a pretty balanced market. You’re almost 50 50 on listings to sales. Again, pretty healthy are people waiting for the fall market to put their property on? That’ll be the next question and whether or not we’re going to see. That much pent-up demand for buying is the other thing.
So, you know, again, are we going to see listings? If we don’t see a lot of listings in that it naturally will drive the market to be hot because there’s going to be enough buyers. But if we see enough listings, I think you may see the buyers soften and the 2023 analysis or the anticipated market is for it to soften.
A BRISK MARKET IN THE FALL?
So I think fall could be pretty brisk. I think going into the spring market, we may see it still. Somewhat active, good market. I think we get to this time next year or the summertime next year, you’re probably gonna see it soften again. And we may not see a strong market in the fall based on what the interest rates are doing.
REAL ESTATE CONTINUES TO BE A GREAT INVESTMENT
So I don’t see any major falls. Real estate is always a great investment. And in today’s day and age, we’ve seen it. You know, people have this vision, that real estate isn’t going to continue to go. I think that it’s proven itself through some tough times, real estate is a great investment for people.
And I think it’ll continue to rise. I think people are shifting their mindset to lifestyle a little bit more. So they’re going to spend the money on a monthly basis. They want to be in the lifestyle that they want. So I think that’s where the market will continue to drive it. And we work really hard to pay our bills.
So why not live where we want to live. And I think that’s what’s happened and will continue
QUESTIONS? GET IN TOUCH WITH MIKE
[00:08:43] Rod: Good to know. Well, Mike, how do people get in touch with you these days? And we’ll put notes in our show notes and links and all that sort of stuff, but what’s, what’s the best way to reach you?
[00:08:53] Mike: Well, we have obviously we’ve got a fantastic website at fvlifestyle.com and we would love to hear from you through there.
We have various links to what’s happening in our community. It’s a big part of what we’re trying to promote is our community and businesses. You can reach me directly at 6 0 4 8 8 9 7 6 5 3. And that can be done by text, or you can give me a call. Sometimes I have to return the calls. So texting sometimes is best.
My office is Royal LePage. I have a number 6 0 4 5 3 8 2 1 2 5. You know, it’s, we’ve almost stepped away from the office calls. We’ve almost gone to direct calls. And so, you know, it’s interesting too, that number is still out there, but it’s rare that I get a call. And then the last would be my email direct email, which is firstname.lastname@example.org
So if you have questions, you can always send them my way. The website’s a great forum for us because it obviously allows you to ask some questions and get some information for yourself rather than feeling like you’re being chased by a real estate agent right away. So feel free to drop into our website and check out what we’re doing.
Well, obviously Rod you’re integral to that, working with that. So and then I just welcome any calls and questions, obviously. Lots of questions coming up for everybody at this time in the market. So don’t hesitate to reach out.
[00:10:12] Rod: Yeah. So just in case, people miss that it’s Mike at F V as in Victor Lifestyle.com. I had someone confused about that the other day, thinking V’s can sound like B’s, you know? Excellent. Thanks, Mike.
[00:10:24] Mike: Hey Rod. Thanks very much. Nice chatting with you. And I wish everybody luck out there and then fall market it’ll be exciting times ahead.
MAKE YOUR NEXT MOVE WITH MIKE
Royal LePage North Star Realty
Mike brings several decades of real estate experience and strong marketing background to the FV housing scene. Whether you’re looking for help finding your perfect home at your perfect price, or you need professional support and friendly expertise to sell your home in an ever-changing market, Mike comes to the table with a true passion for helping you make the best possible move.