Fraser Valley Sees Home Sales, Price Dip Due To "Cautious Anticipation"

2023-8-30

The Fraser Valley saw a dip in home sales this August thanks to a combination of typical seasonal market trends and the looming decision on interest rates, the Fraser Valley Real Estate Board (FVREB) said on Tuesday. After hitting a 15-month high of 1,935 in June, home sales fell off to 1,368 in July and then to 1,273 in August. The number of new listings simultaneously dropped from 3,424 in June to 2,855 in July and then 2,622 in August. Regardless, both numbers were an improvement compared to August 2022, by 25.2% and 28.2%, respectively. Because the drop-off in sales in August was bigger than the drop-off in new listings, the number of active listings in the Fraser Valley saw a minor 1.5% increase and is now up to 6,291, which FVREB notes is just 7% off of the 10-year average for August. “Many buyers are in ‘watchful waiting’ mode as they hold off on decisions in anticipation of potential further rate changes.” said FVREB Chair Narinder Bains. “With prices relatively stable and active inventory on the rise, we hope to see more new listings come on stream over the next couple of months, especially if rates hold steady.”

The Market Lean

With the aforementioned statistics, we can now identify the sales-to-new-listing ratio as well as the sales-to-active-listings ratio, which are two quantitative indicators that can give us a sense of whether the market is leaning towards buyers or sellers. The Fraser Valley saw a dip in home sales this August thanks to a combination of typical seasonal market trends and the looming decision on interest rates, the Fraser Valley Real Estate Board (FVREB) said on Tuesday.

 

After hitting a 15-month high of 1,935 in June, home sales fell off to 1,368 in July and then to 1,273 in August. The number of new listings simultaneously dropped from 3,424 in June to 2,855 in July and then 2,622 in August.

 

Regardless, both numbers were an improvement compared to August 2022, by 25.2% and 28.2%, respectively. Because the drop-off in sales in August was bigger than the drop-off in new listings, the number of active listings in the Fraser Valley saw a minor 1.5% increase and is now up to 6,291, which FVREB notes is just 7% off of the 10-year average for August.

 

“Many buyers are in ‘watchful waiting’ mode as they hold off on decisions in anticipation of potential further rate changes.” said FVREB Chair Narinder Bains. “With prices relatively stable and active inventory on the rise, we hope to see more new listings come on stream over the next couple of months, especially if rates hold steady.”

 

Home Prices Dented Slightly

Sales and new listings were not the only measures that saw a dent, with home prices also seeing minor decreases in August. The benchmark price is now $1,534,500 for single-detached homes, $846,200 for townhouses, and $553,500 for condominiums. Compared to July 2023, those numbers represent a minor decrease of 0.6% for single-detached homes, 0.5% for townhouses, and 0.4% for condominiums. It remains to be seen if those decreases are just a blip on the radar, but as we head into the fall, market activity is expected to pick up as usual. Before then, however, all eyes will be on the Bank of Canada this week, with their next policy interest rate announcement set for Wednesday, September 6.

Vaughan Mills
University of Calgary

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