Hi Hi there,
I wanted to say thank you to you and all my clients for making it possible for me to make the Fraser Valley Real Estate Board's Medallion Club, meaning I was in the top 10% of total sales of all 5000+ agents working in the Fraser Valley. I couldn't be where I am today without amazing clients like yourselves!
THANK YOU!
Newsletter continues below...
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To say that 2024 was a slow year in the Fraser Valley real estate market would be an understatement. The year finished with a total of 12,987 residential properties being sold, making it the slowest year in the past 10 years, with 23% fewer sales than the 10-year average.
Throughout the year, we saw average home prices rise for the first three months, only to decrease for the rest of the year, with the average home costing $965,000 at the end of December 2024—2% lower than December 2023’s $984,000.
This is all despite the fact that Canada’s policy interest rate held steady at 5% until May, then dropped over the next seven months—a rather significant 1.75%—down to where we are today at 3.25%. This marks the first time in the last 10 years that affordability has significantly improved in housing.
A five-year fixed-rate mortgage in December 2023 at a mortgage rate of 5.29% would have cost $4,711 monthly (using the average home prices as mentioned above). In December 2024, with a five-year fixed rate of 4.44% and the decrease in home price, monthly payments for a new mortgage on that same average house would now be $4,225 per month. That means that average monthly payments are 10% lower today than they were just one year ago for an equivalent home. When prices dropped in 2022, it was directly related to interest rates rising, and the two essentially canceled each other out. But now we are seeing both a decrease in price and interest rates.
How long will this increase in affordability last, though? That remains to be seen, but many industry experts think that we are due for activity levels to pick up. Royal LePage Canada is expecting to see a 6% increase in prices year-over-year across Canada, and RE/MAX Canada is forecasting a 25% increase in sales and a 5% increase in prices for Canada. Keep in mind that these are predictions for the whole of Canada, and the larger markets, like Vancouver and Toronto, typically see more significant swings than the rest of the country.
In my opinion, we won’t see a market like we saw at the end of 2021 and the beginning of 2022, where prices were skyrocketing and every home was selling in one week with 10+ offers. Instead, we will likely see a more typical year for the Fraser Valley, with prices rising at a stable rate and sales increasing in all areas. Some homes will still go to multiple offers, but I do not think it will be the majority, as we have seen in the past.
Unfortunately, inflation has taken its toll on the average Canadian, and their dollar does not stretch as far as it did just a few years ago. The crunch that we are feeling in our wallets is difficult to put into numbers, but most people won’t be as comfortable putting the same amount of their income into housing as they did before. This will likely keep things calmer than we saw in the last market boom, which will hopefully keep the home-buying and selling processes more relaxed and less stressful than it was during all that craziness.
Despite the relief we have seen over the last year in interest rates, we do have to keep in mind that many mortgages are coming up for renewal on homes purchased at peak prices and extremely low interest rates. The majority of renewals for those who purchased during that period will see an increase in their monthly payments, which may prevent many of those owners from making a move upwards that they would have otherwise made.
With 30,249 new residential listings in 2024, we did experience a year-to-year increase of 23% over 2023, and a 25% increase over the 10-year average. The year-to-year jump is significant, but the increase over the 10-year average is not as substantial as it might first appear. The number of new listings does not consider the number of new homes that have been built in the Fraser Valley over the last decade. While it is a very difficult number to find, there have been a significant number of new homes built. In addition to all the new homes, our population has also increased. With more homes and more people in the area, we should be seeing an increase in both listings and sales every year, without that necessarily meaning that activity has really picked up year over year. The fact that we aren’t seeing this increase likely means that people have been staying in their homes for longer than they used to before moving to a new home.
Overall, 2025 looks like it may be a great time to make a move and take advantage of the current affordability increase we experienced over the last year.
If you are planning on making a move, or even considering it, I would love to hear from you so we can start making a plan for your unique situation today!
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HPI® Benchmark Price Activity
• Single Family Detached: : At $1,480,400, the Benchmark price for an FVREB single-family detached home decreased 0.1% compared to November 2024 and increased 0.9% compared to December 2023.
• Townhomes: : At $827,900, the Benchmark price for an FVREB townhome decreased 0.9% compared to November 2024 and increased 0.3% compared to December 2023.
• Apartments: : At $533,900, the Benchmark price for an FVREB apartment/condo decreased 0.4% compared to November 2024 and decreased 0.2% compared to December 2023.
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