WOW! What a year we had in 2021…

…this is certainly true for many aspects of daily life, but it is an understatement when it comes to the Fraser Valley Real Estate Market.  With multiple month to month records broken for total number of sales and record low inventory numbers, it comes with no real surprise that the year itself broke a couple records as well.

With 27,629 sales in the Fraser Valley in 2021, the market shattered the previous record of 23,974 sales set in 2016. We do have to account for the fact that there are more homes that exist now compared to 2016, but not by nearly enough to make this difference negligible.

December 2021 was also the second highest number of sales ever for the month of December with 1,881 sales, second only to December 2020’s 2,086 sales set just a year ago. The only reason that December 2021 did not shatter December 2020’s record was simply because we did not have the inventory of homes to actually sell. In December 2020, there were 3,692 homes available on the MLS for sale as opposed to the 1,546 homes available in December 2021. That’s right, there were fewer homes available by the end of the month than there were homes that sold!

1,546 homes available. That is the lowest inventory the Fraser Valley has seen in 41 years. If there are more homes now than in 2016, we can conclude with absolute certainty that there are substantially more homes that exist in the Fraser Valley now than there was 41 years ago, making our current inventory levels at an absolutely all time low. If you read this newsletter at all in 2021, you will know that this inventory problem is not new, but it is worth pointing out that it is getting worse. Simple laws of supply and demand are at work for the continuously rising housing costs and the sudden surge of COVID-19 cases will likely make many would be sellers hesitant to list their homes for sale amplifying the current lack of inventory into the near future. 

If you are considering making a move up, now may be a great time to do so. You likely have some pretty significant equity in your current home to help with the down payment issues of financing your next home, as well as low interest rates that are forecasted to rise over 2022.  While it is likely true that the market will continue to rise through 2022, making it seem that there is not a rush to make a move happen, rising interest rates and rising housing costs mean that your equity being built in your current home may be outpaced by rising costs of borrowing money as we get further into the year.

If you are looking to sell and not make another purchase, I would say that the right time for that is when you are ready to do so as holding onto that property a little longer will likely just increase its value once you are ready to let it go.

If you are looking to get into your first home or purchase an investment property without selling another property to finance it, sooner is almost certainly going to be better as prices and interest rates continue to increase making affordability even more difficult. I know I sound like a broken record, but today’s market is likely the most affordable it will be going into the future. Unfortunately, the current buying environment is not the most ideal, as we currently have between 3-5 buyers (depending on the type of property) for every home listed for sale. This of course is the demand part of the law of supply and demand and is one of the main reasons that we continue to see prices increase.

I predict much of the same as we saw in 2021 to continue into 2022 with low inventory numbers causing prices to rise right through the year, though I would predict a smaller year to year increase as the market pushes the limits of what British Columbians can afford. 2020 to 2021 saw an average price increase of 33% in the Fraser Valley, and I would predict that number to be between 10-15% over the next year; Still an absurdly high annual increase, but not quite as absurd as we saw last year.

If you are thinking of making a move in the near future, be sure to get in touch soon so we can start making a custom plan tailored to your unique situation.