Fraser Valley residential real estate

Key Take-Aways from the November Statistics

The Fraser Valley Real Estate Board has published their November home sales data, and while it’s not as exciting as last month’s spike in home sales, sales did still outpace new listings, and the decreases in Benchmark Prices are decelerating. At least some of the pullback in market activity can be attributed to the time of year, so it will be interesting to see what happens come the new year.

Highlights from the November statistics include:

• Townhomes were the only home type to see an increase in Benchmark Price, and detached home prices are levelling out.
• New listings dropped 24.2%, and active listings declined 9.6%, compared to last month, indicating the market is chewing through inventory.
• Minimal new listings, so the surge in sales chewed through available inventory, causing active listings to end the month 1-6% below last month.
• Total sales declined 14.3%, month-over-month
• The sales-to-active listing ratio decreased from 15% to 14% because sales outpaced the quantity of new listings.
• Typical for the season, days on market increased for all major home types.

How the Fraser Valley land market is reacting

To borrow an over-used real estate market cliché, it has been the tale of two markets this Fall in the Fraser Valley. On one hand, there are owners of development sites being buried by expensive debt with little to no equity left in the land, while at the same time, there are multiple offers showing up on other sites. It’s a fascinating dichotomy which makes it a difficult market to navigate and challenging to determine how much demand there will be for any particular development site; however, these are the demand themes we are seeing currently:

• The greatest demand is for medium-sized infill townhouse sites in Surrey and Langley, where the asking price is reflective of recent increases in construction costs and development fees.
• There is healthy demand for single-family and duplex, but it may be due to the lack of availability more than an outsized amount of demand as there is slightly less faith in the absorption rates of the relatively more expensive single-family and duplex home type.
• Land with long and/or unknown development timelines is low on the demand list unless it is priced very well, then it can get multiple offers.
• Demand is spotty for condo land depending on the perceived level of future condo housing supply in a given sub-neighbourhood. ie. It’s challenging to find purchasers for condo sites in Willoughby but less difficult in South Surrey, Fleetwood or Surrey City Centre.

Among all of my conversations, one thing is consistent: there is still faith in the Fraser Valley home market in the medium to long term. Developers and investors are being cautious in their underwriting and acquisition behaviour, but nearly all are shopping for their next site.