Fraser Valley Home Sales Fall Despite Bank of Canada Rate Cut

The recent 25 basis points rate cut by the Bank of Canada on June 5 failed to stimulate home sales in the Fraser Valley, as reported by the Fraser Valley Real Estate Board. Despite the policy change, the market continued to experience slow sales, with inventory levels rising for the sixth consecutive month. This article explores the latest statistics, trends, and insights to provide a comprehensive view of the current real estate market in Surrey, BC.

Decline in Home Sales

In June, the Fraser Valley Real Estate Board recorded 1,317 home sales, marking a 13% decrease from May and a significant drop of over 30% compared to both June 2023 and the 10-year seasonal average. This decline in sales indicates that the rate cut was insufficient to entice buyers back into the market.

Jeff Chadha, Chair of the Fraser Valley Real Estate Board, noted that while sales remain soft, well-priced properties are still attracting buyers and selling within three to four weeks. This highlights the importance of strategic pricing in a sluggish market.

Year-to-Date Sales Comparison

Year-to-date, the Fraser Valley has seen a total of 7,866 sales, reflecting a 4.5% increase over the same period in 2023. While this uptick is encouraging, it underscores the disparity between current sales figures and historical averages, revealing a cautious market sentiment despite the rate cut.

Insights from REALTORS®

Local REALTORS® report that while there is interest from buyers, many are adopting a wait-and-see approach, hoping for further price drops or additional rate cuts. The ongoing economic uncertainty, including inflation concerns and job market stability, plays a significant role in buyer hesitation.

Continued Rise in Inventory

Inventory levels continued to build in June, reaching 8,350 active listings—a 41% increase from June 2023 and the highest in five years. This consistent rise in inventory, now for six straight months, suggests that the market is becoming increasingly favorable for buyers, with more options available.

Despite the expectation that increased inventory would improve affordability, prices in the Fraser Valley have remained relatively flat. This indicates a stable market where supply and demand are balancing each other out.

Breakdown of Active Listings

The growth in active listings spans all property types:

• Single-family detached homes: An increase of 35% year-over-year

• Townhomes: A 38% rise compared to June 2023

• Condos: Up by 45%, reflecting a surge in available units

This broad-based increase in inventory provides diverse options for buyers, whether they're looking for a spacious family home, a cozy townhome, or a modern condo.

Impact on Seller Strategies

Sellers are adjusting their strategies in response to the increased competition. Pricing properties correctly from the start and making necessary improvements to enhance curb appeal and interior aesthetics are becoming more critical to attract serious buyers in a saturated market.

Balanced Market Conditions

New listings in June dropped by 9% from May, totaling 3,418. The sales-to-active listings ratio stood at 16%, which falls within the range of a balanced market (12% to 20%). These balanced conditions imply that neither buyers nor sellers have a significant advantage, creating a stable environment for transactions.

Market Stability Factors

Several factors contribute to the current balanced market:

• Steady Employment Rates: Employment stability in Surrey and the broader Fraser Valley supports a balanced demand for housing.

• Consistent Interest Rates: Despite the recent cut, interest rates remain relatively stable, providing predictability for buyers' financing options.

• Economic Policies: Local and national economic policies aimed at stabilizing the housing market contribute to balanced conditions.

Baldev Gill, CEO of FVREB, emphasized the importance of having thoughtful conversations with REALTORS® and lending professionals. He advised against relying solely on media reports about potential future interest rate changes, stressing the need for personalized advice based on current market conditions.

Average Days on Market

The average number of days homes are spending on the market in June varied by property type:

• Single-family detached homes: 22 days

• Townhomes: 20 days

• Condos: 30 days

These figures suggest that while some properties are selling relatively quickly, others, particularly condos, are taking longer to move.

Regional Variations

Market dynamics can vary significantly across different neighbourhoods in the Fraser Valley:

• Central Surrey: Homes in this area are selling faster due to its central location and amenities, averaging 18 days on the market.

• South Surrey: Known for its upscale properties, homes here take longer to sell, averaging 35 days due to higher price points.

• Cloverdale: A balanced area with a mix of new developments and older homes, averaging 25 days on the market.

Steady Benchmark Prices

Benchmark prices in the Fraser Valley remained relatively flat in June, with the composite Benchmark price down 0.5% from May and a 3.2% decrease from June 2023. The average price in June was $1,066,196, reflecting a 2.2% decrease from June 2023 but a 2.5% increase from May 2024.

Price Stability Insights

Several factors contribute to price stability:

• High Inventory: Increased supply tempers significant price increases.

• Balanced Demand: Consistent buyer interest prevents drastic price drops.

• Economic Uncertainty: Cautious economic outlook moderates price volatility.

Additional Resources

• Real Estate Affordability Calculator: Calculate what you can afford in the current market.

• Complimentary Home Evaluation: Find out the value of your home with a free evaluation.

• Home Search: Explore available properties and find your next home.

• Current Market Insights: Stay updated with the latest market trends and news.

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Disclaimer

This article is intended for informational purposes only and does not constitute professional advice. Always consult with a qualified real estate professional before making any real estate decisions.

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