Another month has come and gone and that means it’s time to take a look at what is going on in our Fraser Valley Real Estate Market.  Once again, we have another month in the books with declining sales and prices as the market responds to increasing interest rates, inflation, and general buyer sentiment.

With only 993 sales in July 2022, we saw a decrease of 23% compared to June 2022, and 51% fewer sales than July 2021 and 40% fewer sales than the 10 year average for the month of July.  This is really not a big surprise as this has been the trend for the last 4 months as we rapidly transitioned from a very strong sellers’ market, to what is now technically a balanced market (though it may feel more like a buyers’ market since we have been almost exclusively in a sellers’ market for the past 7 years).  This is most likely tied to the increase in interest rates we have seen over the same amount of time the market has been in decline, as well as natural buyer sentiment dipping as prices were essentially “out of control” for about a year during the pandemic.

Prices have also decreased for the fourth consecutive month due to the weaker demand, most notably for detached homes, which had a benchmark price of $1,594,400 at the end of the month, down 4% from last month and down 10% from their March peak of $1,776,700. Benchmark prices for residential combination homes are still up 18% from last year.

As we touched on briefly earlier in this newsletter, the market has shifted to what is defined as a “balanced market” overall, and is just technically considered a “buyers’ market” in the detached home category with only 11% of detached homes listed actually selling in that month.  The Fraser Valley Real Estate board defines a buyer’s market as anything less than 12%, a balanced market from 12-20%, and a sellers’ market above 20%.  Townhouses finished the month balanced at 18%, and condos technically are still in a sellers market with 28% percent of homes listed selling. The discrepancy between detached homes and condos is the opposite as to what was happening at this time last year as detached homes were out performing attached properties; this is likely due to affordability as the interest rates are rising and an average buyer is qualifying for significantly less than they were just a few months ago.
 

If you are thinking of selling and buying up in property value, the market in many ways is relative.  If your home has decreased in value, or is continuing to decrease, whatever you are buying into next is likely doing the same. The best time to buy and/or sell your home where you live will always be when the time is right for you to do so.

If you are just selling a home, today will likely net you a higher sale price than tomorrow so selling sooner is probably better than later, though if you can hold on to your property a little longer, there is a very high likelihood that the market will go back up in the future, likely within a couple years depending on what the economy does.

If you are buying into a new home for the first time, or getting back into the market, time is not necessarily on your side either as interest rates will likely continue to rise, diminishing your buying power. While it is true that prices will likely continue to decline, you do want to be aware of your monthly payments and actual affordability, which is just as connected to interest rates as it is to the actual sale price. If you have all cash or mostly cash with a small mortgage, it may be best to be a bit pickier when it comes to buying a home as interest rates will have a less negative effect on you, and prices will likely continue to decrease.

Overall, it is never really a bad time to buy or sell if it seems like the right time in your life to do so.  If you are thinking of making a move happen soon, let me know so that we can start making a plan custom tailored to you and your unique needs.