Attached housing sales drive this year’s activity
By Harvinder Sandhu
2017 has been an interesting year so far for the real estate market.
After last year’s screeching halt to the market when the 15% sales tax was added to foreign buyers price in August, many people thought the real estate market will not bounce back, let alone that the prices will continue to rises. Price did keep going up, but only properties below the $700,000.00 were selling fast now.
Majority of first-time buyers can’t afford single family homes anymore as prices for detached houses are much higher, instead these first-time buyers, with many being eligible for the BC Liberal government’s Home Partnership Program, are now buying attached housing. Hence the spike in price for townhomes and condos, especially in Vancouver’s downtown core where 1 bedroom units were selling at more than $100,000.00 over listed price.
Attached properties started to soar,the price going up month after month to the point where now it was these attached homes going over asking and by the time summer rolled around, much older complexes were selling at the price of detached houses from 4 to5 years ago.
“I believe it has been such a long time since we have seen balanced market that the perception is the market has stalled, or is in for a big drop. The new norm may just be a balanced market where a house may not sell in 60 days or less…time will tell.” Trisha Callam of RE/MAX Performance.
Fraser Valley Real Estate Board’s numbers show that Fraser Valley led in the– second strongest August historically in terms of sales. The price hike in Vancouver pushed prices up in the valley, resulting in the first time in history sales in Fraser Valley outpaced sales in Vancouver.
Below is excerpt from the Fraser Valley Housing Market Statistics for August 2017.
The Fraser Valley Real Estate Board processed 1,879 sales of all property types on its Multiple Listing Service® (MLS®) in August, an increase of 10.9 per cent compared to the 1,694 sales in August of last year, and a 3 per cent decrease compared to the 1,937 sales in July 2017.
Of the total sales processed 470 were townhouses and 548 were apartments, together representing 54% of market activity in August.
Last month the total active inventory for the Fraser Valley was 5,712 listings. Active inventory decreased by 4.3 per cent month-over-month, and decreased 6.4 per cent when compared to August 2016.
The Board received 2,633 new listings in August, a 20.2 per cent decrease from July 2017, and a 7.3 per cent decrease compared to August 2016’s 2,840 new listings.
For the Fraser Valley region, the average number of days to sell an apartment in August was 17 days, notable when compared to 26 at this time last year. Townhomes sold in an average of 16 days and single family detached took 25.
HPI® Benchmark Price Activity
- Single Family Detached: At $976,000, the Benchmark price for a single family detached home in the Valley increased 1 per cent compared to July 2017, and increased 10.2 per cent compared to August 2016.
- Townhomes: At $491,900 the Benchmark price for a townhome in the Fraser Valley increased 1.2 per cent compared to July 2017, and increased 16.6 per cent compared to August 2016.
- Apartments: At $349,300, the Benchmark price for apartments/condos in the Fraser Valley increased 4 per cent compared to July 2017, and increased 32.8 per cent compared to August 2016.
The market in the attached housing category is still strong, but not as strong as it was 2, 3 months ago. Prior to the interest rate hike, multiple offers for attached housing were norm, in the last 2 months, there’s less of multiple offers unless the unit is unique. The sudden increase of interest rates by Bank of Canada in September also added to the overall slowing down of home sales, especially in the detached housing category.
For those who can afford to buy detached houses, there is inventory that has been sitting for a while, the only challenge; many sellers believe they should still be able to get the same price as from spring to summer of 2016 during the red-hot crazy market we had. That time is gone, may come again but when, that’s anybody’s guess.