FRASER VALLEY

Sales shoot up; new mortgage rules will help buyers

Fraser Valley home sales rocketed up in October after months of buyers sitting on the sidelines watching interest rates drop. Pent-up demand seemed literally to explode for the first time since successive Bank of Canada rate cuts began last June. Three of the cuts at 25 basis points each had lowered the central bank’s key lending rate to 4.25% by early September but buyers still remained hesitant even through that month. By October, however, variable mortgage rates appear to have come down sufficiently to spur last month’s rebound, while another 50 basis point reduction bringing the BoC rate to 3.75% on October 23 was the latest fuel injection in the current boom.  Whether the surge in demand will be sustained remains to be see, as prices could see upward pressure under current conditions. However, with inflation appearing to be under control, it is widely thought the central bank will make further rate reductions in the coming months. October’s sales spike recorded 1,330 transactions, an increase of 35% from the previous month and 37% higher than one year ago. The Valley’s new listings in October, unlike the significant uptick seen in Metro Vancouver, declined slightly, down 5% from September but still with a healthy total of 3,194, leaving the total available inventory at the end of October at 8,799, down 3% from the preceding month but up 34% over the same period one year ago, The reduced number of new listings is not surprising, as many Fraser Valley sellers got their listings out over the preceding months in anticipation of  the surge in sales. Market watchers will now be keeping their eyes on potential price increases as demand increases with lower borrowing costs, and other home buying incentives. Coming next month are new federal new rules for mortgage qualification and monthly payment schedules.  Effective December 15, home buyers who qualify for mortgages with a downpayment below 20% will see the current mortgage cap of $1-million increased to $1.5 million. In addition, the Canadian government will expand eligibility for 30 year mortgages to all first time home buyers and to all buyer of newly built homes, including condominiums. Other measures will allow insured mortgage holders to switch lenders at renewal without being subject to another mortgage stress test. Upward price pressure with the new rules is likely. At the end of October, the combined benchmark price for a residential property in the Fraser Valley was $971,700, a 0.7 decrease from the preceding month, while 36% higher than five years ago.

Please review my monthly selection below of benchmark prices for comparable properties in different areas of the Fraser Valley. Each overall benchmark for a property types is accompanied with the three closest average prices on each side of the benchmark. The month-over-month price changes are indicative of the typical fluctuations with the relative market activity. For more information on any specific neighbourhood, please give me a call. And if you are considering listing your home for sale, I can prepare a Customized Market Analysis and advise you on the optimal listing price in this dynamic market. Please don’t hesitate to call. I love to help my clients in any way I can. .     

Detached Homes

The benchmark price for a detached home in the Fraser Valley at the end of October was $1,488,100, a decrease of 0.9% from the preceding month. The extremities of this average were South Surrey/White Rock at $1,908,200 and Mission at $1,017,100. The three municipalities closest to the benchmark on the higher side of the average were: Cloverdale at $1,493,600, a decrease of 0.9% from the preceding month; Surrey at $1,517,600, an increase of 0.5% from the preceding month; and Langley at $1,613,500, a decrease of 1.2% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $1,475,300, a decrease 1.5% from the preceding month; North Delta at $1,412,500, a decrease of 3.8% from the preceding month; and Abbotsford at $1,195,900, a decrease of 0.4% from the preceding month.

Townhouses

The benchmark price for a townhouse in the Fraser Valley at the end of September was $833,200, a decrease of 0.3% from the preceding month. The extremities of this average were South Surrey/White Rock at $957,800 and Abbotsford at $649,000. The three municipalities closest to the benchmark on the higher side of the average were: Cloverdale at $654,200, an increase of 0.4% from the preceding month; Langley at $864,800, a decrease of 1.0% from the preceding month; and South Surrey/White Rock at $957,800, a decrease of 0.7% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: Surrey at $819,400, a decrease of 1.1% from the preceding month; North Surrey at $793,900, an increase of 6.2% from the preceding month; and Abbotsford at $649,000, a decrease of 1.3% from the preceding month.

Condominiums

The benchmark price for a condominium in the Fraser Valley at the end of September was $543,300, a decrease of 0.3% from the preceding month. The extremities of this average were South Surrey/White Rock at $644,000 and Abbotsford at $446,700. The three municipalities closest to the benchmark on the higher side of the average were: Surrey at $571,600, a decrease of 0.5% from the preceding month; North Delta at $580,700, a decrease of 0.1% from the preceding month; and Cloverdale at $587,100, a decrease of 3.0% from the preceding month. The three municipalities closest to the benchmark on the lower side of the average were: North Surrey at $480,300, a decrease of 1.8% from the preceding month; Mission at $459,800, a decrease of 0.7% from the preceding month; and Abbotsford at $446,700, an increase of 3.0% 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.