The Fraser Valley Real Estate Board has published 2018’s final month of stats and the year has concluded on a low note. The decreases in many key stats are not surprising for the month of December but regardless it signals continued deceleration of the market.
Detached home sales dipped almost 30% month-over-month, townhouses 12% and condos nearly 26%. Consequently, total annual sales of all homes in the Fraser Valley for 2018 fell to their lowest level in 5 years.
Consumer demand and competition among buyers weakened again in December, evidenced by decreases in sale price as a percent of list price and increases in average days on market for all product types. Sale price as a percent of list price dropped to 93.9% for detached homes, 95.4% for townhomes and fell most dramatically for condos, which closed the year out at 94.5%. Some of this can be attributed to a typical seasonal lull but one can’t ignore that detached home sale prices as a percent of original list price hasn’t been this low since early 2009. Townhouse and condo figures have reached levels consistent with January 2013 and January 2015, respectively. Average days on market has jumped up 11% to 20% depending on home type but remain below 10 year averages for the month of December.
Not surprisingly, this fading demand contributed to additional month-over-month decreases in benchmark prices across all home types. Detached homes are down 1.1%, townhomes are down 0.2% and condos are down 1.0%. The year-over-year change in the benchmark price of a detached home in the Fraser Valley climbed to a peak of +15.5% in March 2018, but this was followed by 7 months of sustained price decreases setting the year-over-year figures on a steady decline ever since. December 2018 marks the tipping point where, for the first time since 2013, the Fraser Valley’s detached home is valued at less today than a year ago. Townhomes and condos have a ways to go before reaching that cross-over, but are not far off: townhome prices are up 3.7% and condos are still up 6.7% over last year.
What does this mean for development land in the Fraser Valley? There is no denying we are in a down market, where sentiment is a spectrum from mild negativity and apprehension to cautious optimism. This is beginning to put buyers of development land back in the driver’s seat, loosening deal terms and putting downward pressure on prices. With that said, as land values are notoriously sticky, we are yet to see a statistically significant quantity of transactions complete at lower values. Many buyers remain sidelined, awaiting cues that the market has reached equilibrium before pulling the trigger on their next site.
Check out our curated summary of the Fraser Valley Real Estate Board’s December stats in infographics below.