Interest rate increases are playing a central role in the market's dynamics
The downward trend in Fraser Valley real estate sales continued in January amid further interest rate hikes, according to the region’s housing industry association.
The market saw significant declines of 12.6% monthly and 52.2% annually for a mere 626 transactions in January. The last time that Fraser Valley saw January sales dip to these levels was back in 2013.
“Buyers are understandably cautious, which explains the slow start to the year,” said Sandra Benz, president of the Fraser Valley Real Estate Board.
At the same time, while new listings surged by 128.3% on a monthly basis to reach 1,833 units, Fraser Valley has seen its lowest levels of new supply for January since 1984.
Taken together, these trends could herald a resurgence of activity in the very near future.
“The pent-up demand that has been building since the last quarter of 2022 will likely give rise to a sales uptick, especially if rate hikes subside, which we expect will be the case,” Benz said. “We also expect inventory to start increasing over the coming months as sellers act on decisions that have been on hold, waiting for rates to peak. As we start to see greater selection across all property categories, we should see demand pick up.”
“After a market slowdown for the past several months, the board is expecting a return to seasonal activity leading into spring,” added Baldev Gill, CEO of the FVREB.
The benchmark home price in the Fraser Valley continued to veer lower, with declines of 1.4% monthly and 15.1% annually to settle at $942,200.
