The Fraser Valley real estate market is settling down. What does that mean for you if you are thinking of selling or buying a home?
If you have been a Fraser Valley homeowner for any length of time, you will have noticed that the real estate market in southern British Columbia is continually in a state of flux. The region’s reputation lately is that houses sell quickly and well over the asking price resulting in price growth that is astounding.
The Fraser Valley recently went through a time when there wasn’t enough supply of single-family homes and real estate in other categories. The demand was higher than the supply and homes sold quickly which created an increase in home prices.
Finding the right property for you
As houses were selling fast there was a fear that prices would continue to go up. As a result, people were making quick decisions without doing a lot of due diligence. They also were making compromises instead of looking for the perfect home.
During the past year, it got a little bit more complicated to buy a home in some respects. People were buying on the spur of the moment and not necessarily finding the right investment for them. Throughout 2021 home buyers were competing against multiple bids, no protection clauses, making cash offers, and many times had to pay much higher than asking.
Now that the pace of the market has slowed down it feels like a very large shift. You are now in a place where you can write an offer on a property that has subjects. Amazingly, we couldn’t do this in the recent market.
The October 2022 Fraser Valley Real Estate Board Market Report*
On October 5th, 2022 the Fraser Valley Real Estate Board released a report with the headline “Fraser Valley real estate market continues to stabilize heading into the fall season.” They said, “Continued slowing sales and a slight rise in inventory in September combined to bring greater stability to the Fraser Valley housing market.”
According to this report, a good portion of the listings were taken up in September 2021. In comparison, in September 2022, we have a similar number of listings but a lower percentage of property sales. The absorption rate has dropped a little and the market is entering a more balanced state.
Interest rate hikes and new rules
“There’s no question that interest rates continue to be a primary factor in the market trends over the past six months or so,” said Sandra Benz, President of the FREB (Fraser Valley Real Estate Board.) “The sales slowdown we’re seeing reflects a level of caution exercised by buyers, who are likely waiting for the market to settle further before jumping in. In the meantime, we anticipate prices may continue to decline across all categories.”
In addition to interest rates rising, there are new rules coming into effect in the new year around foreign property investment and that will have an impact on real estate in certain areas of the region.
Moving for lifestyle reasons
Another continuing factor in the market is that people move for lifestyle reasons. Maybe their family grows and they need a larger home, or they want to move to a quieter location, or downsize. Now there are some great opportunities that weren’t available to buyers six months ago because of the fast pace of the market and high prices. It sounds crazy, but buyers can now actually look at several homes that might suit their needs and actually negotiate rather than simply agreeing on what the seller’s requests or requirements were.
“Better Shop Around”
Another positive change is that buyers can shop around for financing. For a period of time during the last year brokerages and banks were so busy that it took 2 to 3 weeks to do the financing. That has changed. It’s now back to about 48 hours. This makes the financing process and buying and selling process smoother. Compared to the hypermarkets that we had in the last year, as a buyer you will now start to get greater value for your real estate investment for most property types because prices are decreasing.
Is it a good time for you to buy or sell a home?
It seems like everybody wants to know if it is a good time to buy a new home or sell your current one. the answer is, everyone’s situation is different and that’s why you are encouraged to get some of this critical advice from real estate professionals.
Real estate professional Mike Wilson is here to answer your questions, get detailed information about your unique property situation, and help you create a plan that will work best for your real estate dollar. See his contact information below and contact him today.
Listen to Mike’s Fraser Valley Real Estate Update for October 2022 on the FV Lifestyle podcast. CLICK HERE
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MLS® HPI Benchmark Price Activity*
FVREB Single-Family Detached: At $1,462,000, the Benchmark price for an FVREB single-family detached home decreased 3.4 per cent compared to August 2022 and increased 4.1 per cent compared to September 2021.
FVREB Townhome: At $822,400, the Benchmark price for an FVREB townhome decreased 2.3 per cent compared to August 2022 and increased 11.6 per cent compared to September 2021.
FVREB Apartment: At $530,400 the Benchmark price for an FVREB apartment/condo decreased 2.1 per cent compared to August 2022 and increased 14.5 per cent compared to September 2021.
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*Source: FRVEB Report https://bit.ly/3ThjSy8