June Market Update (& Mid-year prediction review)

So here we are halfway through 2024. Wow – that happened too quickly! Summer has finally started to warm up! But has the real estate market also started warming? In this article, I’ll conduct a mini mid-year review and see how my 2024 predictions have panned out so far. You can see my 2024 market prediction here but below you’ll find a quick summary.

But first…

Benchmark prices were pretty flat in June (up less than 1%) compared to June 2023. Compared to May 2024, there was a very slight decrease (down <1%) in benchmark prices in the Fraser Valley and in the City of Surrey which I’ve pulled stats separately for below. Generally, sellers have finally come to the table to list properties, increasing inventory. Buyers however may be waiting for more news from the Bank of Canada. This has increased supply which is giving current buyers choices and the ability to browse at a slower pace in many cases.

While the past 3 months has shown a willingness of sellers to list their properties, transactions (aka – sales) have been unseasonably lower than expectation and in fact is almost 30% below the 10 year average. While inventory is higher than its been since 2019, this is actually a loosening of the previously tight market conditions that have existed since Covid days. So how does this all shake out? First, let’s take a quick look at a statement from my December 2023 market prediction:

• The spring market will not be a strong as previous years but the resilience in the market will continue. We will see increased inventory as mortgages renew and more pre-sales are also listed on the market but – this increase in inventory is compared to the current low inventory levels experienced in 2023. There will be stiffer competition due to falling mortgage rates and the entrance of additional buyers looking to enter the market which will impact housing values. There will be  opportunities for the assignment of pre-sales and in some markets for Apartments and Townhouses.

In other words, I was correct but for slightly different reasons. The spring/summer market has seen increased inventory and while buyers haven’t turned up in the levels expected, well-priced homes are still selling relatively quickly. Recently the CREA also reduced their sales forecast for 2024 due to the slower sales in the first half of the year. You can check out their report here.

Here’s what I think will happen over the second half of 2024. I agree with the CREA that sales (number of transactions) will be lower than expected. Sellers will continue to list properties but at a slower pace which will keep the market in balanced territory. There will be opportunities for smart buyers who are patient and willing to work with sellers to obtain the price and (importantly) the right terms for their situations. Sellers on the other hand will need to list their properties at the RIGHT price and be patient knowing that buyers will have many options. Remember, well-priced properties are selling in around 25 days on average.

WHAT ELSE IS NEW IN REAL ESTATE? 

Some interesting things that have happened and may impact your real estate situations are listed below. There have been lots of changes over the past three months so don’t hesitate to ask how this might impact you.

June 2024

• Bank of Canada reduces rate by 0.25%. This is the first rate reduction in 4 years and brings the rate to 4.75%. The next rate decision is July 24th
• Provincial rezoning to allow up to 6 units on single detached property lots was effective June 30th

May 2024

• Short-term rental restrictions go into effect
• Capital gains changes – effective in June increasing from 1/2 to 2/3
• Interest rate decision unchanged in May

April 2024

• Amortization extended from 25 to 30 years for first time home buyers who are purchasing a new build and have insured mortgages – effective August 1,2024.
• RRSP Home Buyer Program amount has increased to $60K from $35K effective August 2024
• BC Flipping Tax for properties owned less than 2 years introduced (ie – up to 20% tax on the profits if sold within 24 months of ownership)

My mid-year review tends to be a long one but here is the short of things. The market is a living, breathing entity. The changes are real time. I am here to help navigate shifting waters and protect your interests. If you have questions or want to discuss how any of this might impact you, I am here to help.

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

June 2024 Market Update for Fraser Valley

June 2024 Market Update for Surrey