2023 saw the lowest number of sales recorded in the Fraser Valley over the last 10 years. This is almost entirely due to the high interest rates we have been dealing with since they started to increase back in March of 2022. 

With only 14,713 sales recorded in the Fraser Valley, 2023 saw 4% fewer sales than 2022, and 23% fewer sales than the 10 year average. Buyers were not the only reason for this though, as 2023 also saw the lowest amount of new listings hit the market in the last 10 years as well.

As we know, the past several years have very much been a seller’s market due to historically low inventory numbers, and unfortunately this slow down in sales has not done anything to build inventory levels back to where they should be for a balanced market. This could mean that we are due for another price increase and a crazy market of multiple offers and homes selling in under a week, once interest rates start to decrease.

Several would be buyers have been holding off due to the high rates, so once the rates do come down, buyers will likely begin to buy at a higher pace depleting our low inventory numbers again, causing the law of supply and demand to drive prices up. Unless we get a flood of new listings in the spring, be ready for the market to feel more like 2021 if rates do decrease. Of course, no one knows when rates will drop, but many economists and analysts are predicting that they will start coming down at some point in 2024. When and by how much? Unfortunately we just don’t know.

As far as December 2023 goes, we saw just 732 residential sales, 17% fewer than the 10 year average for December, 6% fewer than November 2023, but 17% more than December 2022.

New listings in December 2023 were also 17% lower than the 10 year average, 54% lower than November 2023, but 17% higher than December 2022. This brought total inventory number down by 25% compared to November 2023 with a total of 3,549 homes available at the end of December 2023.

The market did technically reach a seller’s market based on the number of homes sold out of every 100 homes listed, with 21/100 homes selling in December 2023. I say “technically” as the low number of new listings and overall sales make the claim of a “seller’s market” a bit lacking in substance. If we break this down by property type, Detached homes were in a balanced market with 15/100 homes selling, while condo’s saw 25/100 homes sell and townhomes saw 28/100 sell.  Anything over 20 is considered a seller’s market, between 12 and 20 is balanced, and less than 12 is a buyer’s market.

Now may be a good time to make a move if you are just buying, or selling and upgrading, despite the higher interest rates, as the potential equity gains you could see if prices increase when rates do drop will outweigh the higher monthly payments in the short term. If you wait too long and rates come down, but prices go up, your monthly payments would be the same as you’d be paying today, but you lose all the potential equity growth buy purchasing at a higher price.

If you are just selling or downsizing, patience will likely pay off as the potential price increase that is expected once rates do decrease will net you more cash in your pocket.

Overall, 2024 should be a good year to make a move happen, and will most likely outperform 2023 in most categories. Call to start planning your next move!