August 2024 Market Update

Happy first week of school! What a hectic week – but good to see all the little ones back to a routine.

Let’s jump right into things – there’s a lot to cover for August. So without further ado…

The HPI Benchmark prices remains relatively flat (less than 1% change in either direction) in the Fraser Valley and in the City of Surrey. The market continues to be in “balanced” territory with higher available inventory and a slower pace of sales. This gives buyers more selection but also speaks to the importance of pricing your property correctly if you’re a seller.

In the previous two months, there have been two rate cuts by the Bank of Canada to their overnight lending rate. Even with those two cuts, the number of sales transactions remained almost 30% below the 10 year average in the Fraser Valley. On September 4th, the Bank of Canada lowered its overnight rate once again, and currently sits at 4.25%. According to BC Real Estate Association forecasts, this sets the stage for a more robust fall season and I tend to agree based on the increased number of contacts I’ve had so far.

But What About All The Legislative Changes?

This has been a year marked by many changes in the housing market with the introduction of several legislated market interventions (good and bad – I’ll leave it to you to decide which ones are which). Some of the most impactful changes this year include:

• Federal Change: Mortgage amortization extension to 30 years for first time buyers who purchase a new build (otherwise, it is 25 years in most other instances)
• Provincial Change: Extending the notice period to 3 months to tenants when an owner purchaser wants to reside in a home they have purchased (keep in mind if you are a landlord, the notice period is now 4 months if wanting to use the tenanted property for your own purposes)
• Federal Change: Capital Gains changes and
• Provincial Change: The introduction of provincial restrictions for short-term rentals

With the market ever-evolving and new legislation introduced in what feels like an almost monthly basis, it is more important than ever to have an advocate on your side that is on top of the latest changes and looking out for your best interests. Reach out if you want to explore how the above changes (or others) impact your future home buying or selling situation.

Benchmark Prices & Days on Market

Benchmark prices in the Fraser Valley / City of Surrey:

• Detached = $1,523,500 / $1,647,200
• Townhouses = $846,300 / $872,600
• Apartments = $546,200 / $541,800

In the month of August it took a little longer to sell properties when compared to the previous month (29 days in August for all properties vs 25 days in July). The specific breakdown is: Detached (+1 to 33 days), Townhouses (+1 to 27 days)  and Apartments (+5 to 33 days) in July.

Is The Market Still Balanced?

To answer this question, let’s take a quick look at an important indicator – the Sales-To-Active Listing ratio which is basically a calculation of how many sales there were compared to how many active listings.

First, the basics:

• 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 indicates a “balanced” market in August 2024 at 13.7% (balanced). There are variations by property type which are as follows:

• Detached homes: 9.6%
• Townhomes: 17.6%
• Apartments: 12.2%

I discuss these numbers with clients interested in knowing how to position (leverage and timeframe) their offers on a particular property type. Exploring these numbers help to understand what has happened in the past month – not necessarily what is happening right at this moment. So, my feedback is the same – reach out to discuss the most up to date information. Last point here, keep in mind it takes several months to indicate a specific market type – e.g. it takes a few months below 12% Sales-To-Active Listing Ratio before we could say it is a Buyer’s Market.

If thinking about buying a property, reach out to discuss if now is the right time for YOU. If you are thinking about selling, reach out to review a no-obligation up-to-date evaluation of your property’s value in today’s market.

What questions do you have about the recent real estate changes and how it impacts you? Let me know with an email or text.

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

August 2024 Market Update for Fraser Valley

August 2024 Market Update for Surrey