Fraser Valley residential real estate

Key Take-Aways from the October Statistics

Home buyers appear to be back, with a surge in sales being reported by the Fraser Valley Real Estate Board for the month of October. It looks like the Bank of Canada’s last rate cut may have been enough to get consumers off the sidelines.

Highlights from the October statistics include:

• A spike in sales across all home types with detached homes up 48% over last month, townhomes up 26% and condo up 33%.
• A drop in average days on market for detached homes, townhomes and condos.
• Minimal new listings, so the surge in sales chewed through available inventory, causing active listings to end the month 1-6% below last month.
• Sales outpacing new listings also drove up the sales-to-active listings ratio from 12% to 17%.
• Benchmark prices decreased slightly but should turn around now that demand has returned and inventory is being consumed.

How the Fraser Valley land market is reacting

Momentum continues to build in the residential land market in the Valley, and the outsized interest rate cut from the Bank of Canada in the latter half of the month certainly added to the optimism. We saw a further increase in offer volume and inbound inquiries for land, particularly for townhouse sites.

It’s worth pointing out, however, that while demand has increased for most types of development land and long-term market confidence is building, land values remain well below peak prices from two and a half years ago. If October’s surge in home sales is the beginning of a trend, we should see end product prices rise, supporting higher land values, but for the time being, there remains a significant gap between vendor price expectations and what developers/investors can afford to pay so the volume of completed transactions is growing quite slowly. Purchasing activity has increased, no doubt, but land values are sticky and will likely take some time to move especially given the understandably cautious purchasing behaviour we see – although that, too, is shifting as deal terms have already begun to compress.

Anecdotally, we have also seen many of the land listings that have been lingering on the market for months go under contract the past few weeks, and we are now hearing informal reports of increased traffic and sales at sales centres. Fingers crossed, the December interest rate announcement keeps the flywheel spinning.