Fraser Valley

Fraser Valley poised for sales;  Further interest rate cuts expected

Residential sales volume in the Fraser Valley dropped again in August, continuing the trend in slumping sales of recent months. Buyer hesitancy persists despite a growing inventory of available Valley homes amid dipping prices, and while interest rate cuts bring down borrowing costs. Although housing affordability remains a headline problem requiring more supply to be built as quickly as possible, it should also be noted that the Fraser Valley’s prices have dropped considerably since their pandemic period highs. The combined benchmark residential price has remained below $1-million for the second consecutive month since surpassing this threshold in December 2023, giving Valley homes a comfortable price competitiveness in the lower mainland. August sales in the Fraser Valley totalled 1,067 in August, a 13% drop from the preceding month, making this past August the second slowest seasonally adjusted sales in the last decade. At the same time, new listings last month reached 3,412 homes. While a significant 18% decline from the preceding month, the new listings pushed the Valley’s supply of available home to a robust total of 8,626. The resulting sales-to-active listings ratio of 12% brings the overall market conditions to the cusp of a buyers’ market, not seen in the Fraser Valley since early in 2020. These facts combined with the current downward trend in interest rates by the Bank of Canada, suggest affordability is not the primary driver of the current sales slump. Given that Canada’s Consumer Price Index inflation rate of 2.5% reported in July is approaching the target of 2% set by the central bank, many prospective home buyers have likely decided not to take advantage of the two consecutive Bank of Canada rate cuts seen since July, as they wait for a third rate reduction in the Bank’s October 23 announcement. Many economists predict the next cut will be in line with the previous two 25 basis point cuts. This anticipatory mood is to be expected as October’s announcement could shave another 25 basis points, bringing the central bank policy rate to 4.0%, a significant drop from its post-pandemic high of 5.0% in 2023. Variable mortgage rates in Canada are already following suit with the reductions in the Bank of Canada borrowing costs. A variable mortgage rate as low as 5.3% was posted by Ratehub.ca on September 7.  With further borrowing costs savings on the near horizon, the Valley home market is poised to spring back to life very quickly. The combined benchmark price for a residential property in the Fraser Valley at the end of August was $992,800, a 0.6% decline from the preceding month.

I invite you to review my monthly selection below of benchmark prices for homes in each property category across different areas of the Fraser Valley. Each overall  benchmark average has a cluster of the three closest benchmarks on each side of the average. The extremities of the each average provides you with the range of prices for each cluster, and the month-over-month price fluctuations is typically a reflection of the current demand in each area. Please let me know if you would like to explore any particular neighbourhood. And if you are interested in selling your home, I can prepare a Customized Market Analysis for your property and advise you on the optimal listing price in the current market conditions. Please don’t hesitate to call. I love to help my clients.

Detached Homes

The benchmark price for a detached home in the Fraser Valley at the end of August was $1,523,500, a decrease of 0.4% from the preceding month. The extremities of this average were South Surrey/White Rock at $1,966,700 and Mission at $1,045,900. The three municipalities closest to the benchmark on the higher side of the average were: Surrey at $1,541,200, a decrease of 1.4% from the preceding month; Langley at $1,647,300, an increase of 0.7% from the preceding month; and South Surrey/White Rock at $1,966,700, a decrease of 0.7% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $519.900, a decrease 0.1% from the preceding month; Cloverdale at $1,510,600, a decrease of 0.7% from the preceding month; and North Delta at $1,473,600, a decrease of 0.1% from the preceding month.

Townhouses

The benchmark price for a townhouse in the Fraser Valley at the end of August was $846.300, a decrease of 0.3% from the preceding month. The extremities of this average were South Surrey/White Rock at $969,600 and Abbotsford at $664,500. The three municipalities closest to the benchmark on the higher side of the average were: Surrey at $854,000, a decrease of 0.4% from the preceding month; Langley at $854,700, an increase of 0.7% from the preceding month; and North Delta at $956,900, a decrease of 3.1% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Cloverdale at $845,900, a decrease of 1.4% from the preceding month; North Surrey at $754,200, a decrease of 1.4% from the preceding month; and Mission at $684,400, a decrease of 0.2% from the preceding month.

Condominiums

The benchmark price for a condominium in the Fraser Valley at the end of August was $546,20000, a decrease of 0.9% from the preceding month. The extremities of this average were South Surrey/White Rock at $623,900 and Mission at $462,000. The three municipalities closest to the benchmark on the higher side of the average were: Surrey at $571,300, a decrease of 0.2% from the preceding month; North Delta at $575,500, a decrease of 1.5% from the preceding month; and Cloverdale at $606,700, an increase of 1.4% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $495,800, a decrease of 0.3% from the preceding month; Mission at $462,000, a decrease of 1.0% from the preceding month; and Abbotsford at $443,100, a decrease of 1.1% from the preceding month.

I can help

These are challenging times for home buyers and homeowners. With higher mortgage interest rates, you may need to adjust your financial strategy for your home purchase. If you need help in managing your home ownership plans, I can help. I have post-graduate education in business along with years of experience in both banking and real estate. I am happy to help in any way I can. I want my clients to achieve their goals. Please don’t hesitate to call me.