August 2023 saw more of what was expected, with fewer sales, fewer new listings, and an overall slowdown in activity as the summer drew to a close. This is fairly typical seasonal activity for the summer months, but it was also likely compounded by the recent interest rate hikes in June and July.
With 1,204 sales in August 2023, the Fraser Valley Real Estate Market saw 17% fewer sales than the 10-year average, 7% fewer sales than July 2023, but an increase of 26% compared to August 2022. Combine this with the 2,385 new listings in August 2023, which is only 7% fewer than the 10-year average, we can see that buyers are holding off on purchasing their next home, and sellers are not quite ready to lower their price to account for the recent interest rate increases.
The lack of sales despite the number of new listings has caused prices to start to fall in comparison to the previous month for the first time since January 2023.
It will be interesting to see how the latest decision (Sept 6) from the bank of Canada to hold the interest rate at 5% will affect the market. Last time the rates held steady in January 2023, the market did see prices begin to creep up immediately, though many thought that there would be no further increases. With interest rates the highest they have been since April 2001, we may see prices hold off for the next several months, but only time will truly tell.
With just 22 out of every 100 homes listed selling in the month of August 2023, we are nearing balanced market territory, but still remain in a seller’s market. (Less than 12/100 is a buyer’s market, 12-20/100 is a balanced market, and 20+/100 is a seller’s market) It is important to note that detached homes did dip down to 16/100 homes listed, putting detached homes into a balanced market.
Inventory remained relatively low through the month of August with 5,389 homes available for sale at the end of the month. This is 17% fewer than is typical for the month of August based on the 10-year average.
If you are looking to buy and not sell in the near future, now may be a good time to do so. As we saw the last time that rates held steady, activity began to pick up about a month or two after, making buying more competitive and more likely to be in a multiple offer situation. Of course, we do not know what the Bank of Canada will do in the coming months, so it is certainly possible to see rates increase again. If rates go up again, prices will likely come down with it, but your monthly payments will likely be very similar to what they would be today. If rates hold steady, there is a good chance that prices will hold steady or go up slightly, and if rates do drop, you can bet that prices will go up, and likely quite quickly.
If you are looking to sell and upgrade, the above paragraph is going to apply to you as well. If you are looking to sell and downsize however, there is likely no need to rush into anything until you are ready to do so.
If you are just selling and not buying anything else, it may be a decent time to sell as we do not know what the coming months have in store for us. If rates hold steady, prices will likely remain stable or slightly increase, but if rates were to decrease, holding would be a good option as prices will surely increase.
Overall, it is not a bad time to make a move happen. But as always, the biggest factor in making your decision should be what is right for you and your family. Be sure to get in touch with any future moving plans you might have!
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HPI® Benchmark Price Activity
• Single Family Detached: At $1,534,500, the Benchmark price for an FVREB single-family detached home decreased 0.6 per cent compared to July 2023 and increased 1.6% compared to August 2022.
• Townhomes: At $846,200, the Benchmark price for an FVREB townhome decreased 0.5% compared to July 2023 and increased 0.9% compared to August 2022.
• Apartments: At $553,500, the Benchmark price for an FVREB apartment/condo decreased 0.4% compared to July 2023 and increased 2.5% compared to August 2022.
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