May 2024 Market Update

OVERVIEW

Inventory has continued to increase with more sellers listing their homes for sale in May. Bank of Canada reduced their policy rate by .25%. All of this is positive for the market combining healthy inventory and more options for buyers. Sales however were slower than expected which has pushed inventory levels higher for the 2nd month in a row. The HPI Benchmark prices were slightly higher in the Fraser Valley and in the City of Surrey. See the snapshot below or go to the How Does This Affect Buyers/Sellers section (below) to skip the analysis (aka – my mind going into statistics nerd mode).

THE NUMBERS

Digging  into the numbers, inventory levels (active listings) in the Fraser Valley are over 7900 which is the highest levels since September 2019. Sales in May were lower than expected with 1517 recorded transaction in MLS® – which is an increase from April but lower than the 10 year average. I mentioned in the April update that properties were selling faster with the average days on market falling for 3 consecutive months. In May, the average days on market increased for detached homes to 25 days (from 23 in April), townhouses took 20 days (up from 19 last month) and Condo apartments took 24 days to sell – up 1 from last month.

Here are the benchmark HPI prices by property type:

• Detached homes in the Fraser Valley benchmark price is now $1,530,200 which is a slight decrease from April 2024 but 2.6% increase from the previous year.
• Townhomes in the Fraser Valley benchmark price is now $853,800 which is a slight decrease from April 2024 but increase of 3.3% from the same timeframe last year.
• Apartments in the Fraser Valley benchmark price is now $555,100 which is also a slight decrease from the previous month but increase as measured from the previous year: +2.4%

SALES-TO-ACTIVE LISTING RATIO

When we look at the sales-to-active listing ratio I always start with laying the fundamentals:

• When the ratio is between 12-20%, the market (and prices) are balanced.
• Over 20% for a sustained period and there is upward pressure on prices. (Seller’s Market)
• Below 12% for a sustained period and there is usually downward pressure on prices (Buyer’s Market).

The current sales-to-active ratio for the market as a whole for May 2024 is 21.5% – I would still consider this as balanced with slight variations by property type. By property type the sales to active listing ratio is as follows:

• Detached homes: 17%
• Townhomes: 30.1%
• Apartments: 24.4%

SO HOW DOES THIS AFFECT BUYERS/SELLERS

The increase in inventory can be related to a few different factors, such as seasonal listings in the spring, legislation changes at the Provincial level (e.g. short term rental restrictions) and Federal level (e.g. capital gains changes). While sales have been slower the market still seems healthy. With the recent rate reduction from the Bank of Canada I don’t think we will see a huge jump in sales or prices but rather a steady pace of sales heading into the fall. The next rate decision (July 24) may have a greater impact on the market, especially if it is another small interest rate reduction. But we will have to wait to cross that bridge when we get there to see how that pans out. In the meantime, I love hearing from you – reach out if you want to know how any of the above impacts you specifically.

1 – The Fraser Valley Real Estate Board consists of the communities of Abbotsford, Langley, Mission, North Delta, Surrey and White Rock

May 2024 Market Update for Fraser Valley

May 2024 Market Update for Surrey