After nearly 2 years of record or near record breaking months we are finally seeing the market stabilize and sales activity has slowed drastically.  

With 1,579 sales processed in the Fraser Valley for the month of April 2022, we saw a decrease in sales of 46% compared to April 2021 and a decrease of 37% compared to March 2022.  This is somewhat expected in a shifting market, as sellers are not typically excited to sell for less than their neighbour did 2 months ago, yet buyers can recognize the shift and are not willing to pay the same price as 2 months prior.  This leads to a stalemate where buyers en masse holdout on driving prices up, yet sellers refuse to lower prices leading to a drop in total sales.  

To compound on the fact that we are beginning to see more stabilization, we are also seeing the inventory numbers build up. While April 2022 saw 3,622 new listings, which is 28% fewer new listings than April 2021, and 21% fewer than March 2022, total inventory numbers at the end of April were actually up 15% compared to the end of March 2022. The 10 year average for total active listings at the end of April is 6,451, and while we are certainly below that number it is a vast improvement in comparison to the last several months of being much much lower than the 10 year average.

Perhaps one of the most drastic changes we saw in April was the sales to active listing ratio, which is the number of homes available for sale compared to the number of homes that actually sell. In April 2022 32 of every 100 homes listed sold. Compare this with 57 of 100 homes in March 2022, and 50 of 100 in April 2021, we can clearly see more balance coming to the market.  The Fraser Valley Real Estate board defines anything over 20 of 100 homes selling to be a seller’s market, 12-20 homes per 100 to be a balanced market and anything less than 12 of 100 homes to be a buyer’s market. The last time we had less than we currently have was back in September 2020 when the market was much more balanced and easier for everyone to navigate. 

All of this is leading me to believe that we are likely in for some stability in the future of our market, but we will likely see some fluctuations before we reach that stability.  As I mentioned earlier, buyers and sellers are in a sort of stalemate where sellers are not likely to sell for less than their expectation and buyers are recognizing that prices have stopped rising, so fewer sales are happening altogether. There will likely be another month or two of slower sales before sellers begin to sell for less than peak prices at a higher rate, at which time prices will begin to drop causing buyers to get back in the market again. As the buyers get back in the market and start buying more homes, prices will likely again begin to rise subtly for a month or two before buyers start to slow down again and this will likely repeat itself at smaller and smaller corrections each time until we achieve some real stability.  

Of course if interest rates continue to rise, this will have an effect on things as well.  Rising interest rates will likely cause prices to fall, but decreasing prices with increasing interest rates does not actually benefit buyers financially as their monthly payments will likely stay very similar. Buyers often do not typically think this way, and the actual price of the homes decreasing will likely be enough to stimulate the market to increase the number of buyers again.

Overall it seems like a drastic change with the total sales numbers dropping as much as they have, but in my opinion this is completely expected and is a very strong sign of stability to come in the near future.

If you are planning on making a move in the near future, contact me sooner than later so that we can start making a plan now so you can make the move happen with much less stress once you are ready to do so.