FRASER VALLEY

Fraser Valley home prices adjusting downward; Optimistic outlook for mortgage rates

Fraser Valley home sales dipped 12.5% month-over-month in December, but were still 19% above the same period one year earlier. For market watchers, this was especially welcome news as the new year was also ushered in with the lowest Bank of Canada policy rate since 2022. With its December rate cut of 50 basis points, the central bank’s key rate of 3.25% is allowing commercial mortgage rates to come down as the country’s inflation rate moves into the target range around 2%. For residential markets in particular, the Bank of Canada’s monetary policies have been a 5-year roller coaster ride of home buying incentives and disincentives, first with the onset of the Covid-19 pandemic followed by rampant price inflation. A Covid-19 policy rate of .25% in 2020 would spur a frenzy of home buying only to be followed by escalating prices forcing the central bank to raise its policy rate seven times in 2022. After a total increase of 400 basis points, the Bank had managed to reign in Canada’s spiralling inflation rate, bringing it to 6.3% by the end of 2022. The new year of 2025 now holds the promise of sustaining a balanced residential market along with an inflation rate that bodes well for further interest rate cuts this year. Market watchers will be waiting eagerly for the Bank of Canada’s next rate announcement in two weeks from today. Many economists agree on a strong likelihood of another modest rate reduction on January 29.  The current policy rate of 3.25% or lower possibly at 3%, brings mortgage borrowing within the reach of many home buyers who have been waiting for this year’s good news. However, 2025 will not be without challenging issues in the residential market in other respects. Many mortgage holders who took advantage of the exceptionally low borrowing rates in 2020, will be facing renewals of their 5-year fixed mortgages this year. In some cases, where homes were purchased as speculative investments, higher renewal rates may lead to more homes being listed for sale. Affordability also continues as a obstacle to many prospective home owners but the upside is that home prices are still declining as the market continues to adjust to the economic realities. At the end of December, the combined benchmark price for a residential property in the Fraser Valley was 965,000, a 0.5% decline from the previous month.   

I invite you to look at my monthly guide to benchmark prices for the property type of your choice below.  Each overall benchmark average has the three closest average prices on each side of the benchmark for comparable homes in different neighbourhoods. From the extremities shown for each average, you can get an idea of the range of prices making up the average. However, if you wish to look at specific prices in a neighbourhood, please don’t hesitate to call me. And if you are thinking about selling your home, I can prepare a Customised Market Analysis for your property and advise you on the optimal listing price in the current market conditions. Last month, newly listed single family homes sold on average within 43 days on the market; townhouses, on average, within 36 days; and condominiums on an average of 38 days.

Detached Homes

The benchmark price for a detached home in the Fraser Valley at the end of December was $1,480,400, a decrease of 0.1% from the preceding month. The extremities of this average were South Surrey/White Rock at $1,869,700 and Mission at $1,023,000. The three municipalities closest to the benchmark on the higher side of the average were: Cloverdale at $1,485,700, an increase of 0.4% from the preceding month; Surrey at $1,522,000, an increase of 0.1% from the preceding month; and Langley $1,506,500, 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 $1,472,900, an increase 0.6% from the preceding month; North Delta at $1,415,600, a decrease of 0.9% from the preceding month; and Abbotsford at $1,195,200, an increase of 0.2% from the preceding month.

Townhouses

The benchmark price for a townhouse in the Fraser Valley at the end of December was $827,900, a decrease of 0.9% from the preceding month. The extremities of this average were South Surrey/White Rock at $932,000 and Abbotsford at $654,500. The three municipalities closest to the benchmark on the higher side of the average were: Surrey at $830,300, a decrease of 0.6% from the preceding month; Cloverdale at $847,500, a decrease of 1.1% from the preceding month; and Langley at $862,800, a decrease of 0.5% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $754,600 a decrease of 2.2% from the preceding month; Mission at $682,700, an increase of 0.6% from the preceding month; and Abbotsford at $654,500, an increase of 0.5% from the preceding month.

Condominiums

The benchmark price for a condominium in the Fraser Valley at the end of December was $533,900, a decrease of 0.4% from the preceding month. The extremities of this average were South Surrey/White Rock at $610,000 and Abbotsford at $436,300. The three municipalities closest to the benchmark on the higher side of the average were: North Delta at $569,000, a decrease of 1.5% from the preceding month; Surrey at $559,400, a decrease of 0.5% from the preceding month; and Cloverdale at $569,700, an increase of 0.8% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $478,900, a decrease of 0.3% from the preceding month; Mission at $457,900, a decrease of 1.2% from the preceding month; and Abbotsford at $436,300, a decrease of 1.2% 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.