The Fraser Valley Real Estate Board’s statistics are out for the month of March and frankly, I’m struggling to assign much weight to them as an indicator of the current state of the Fraser Valley real estate market. Considering how quickly the situation concerning COVID-19 is changing and how rapidly the government is throwing new and greater stimulus at the economy, 3-4 weeks ago might as well be years. Regardless, here are the March numbers.
Total sales were up 18% over last year and 7% over February, but they still ended the month at 86% of the March average, a month that is usually the true kick-off to the Spring market.
Historically, the month of March sees a 7-12% increase in active listings. Considering the mid-month pause in market activity, March 2020’s 6% increase is substantial. It’s even more impressive given the reported quantity of active listings is the count on the last day of the month, not a cumulative figure, meaning any drop off in new listings in the latter half of March, would pull the count down.
Average days on market fell 18-23% for attached homes, as expected for the month of March, and it’s likely that we won’t see the impact of the market pause on this metric until the April stats are released. Detached homes saw a slight increase to 38 days on market, bouncing off the enormous drop we saw in February, from 60 days to 37 days.
HPI Prices continued their upward trajectory in March. Condos showed the greatest month-over-month increase at 2.1%, followed by detached homes at 1.8% and townhomes at 0.7%. It will be interesting to see how much impact the COVID-19 pandemic will have on prices. If sellers can wait out the current situation, they may not reduce prices to match the temporary drop-off in demand. April’s statistics should provide more insight into these market dynamics.
What does this mean for development land in the Fraser Valley?
Our conversations with developers over the past few weeks highlight a persistent faith in the market 8-12 months out and, given the length of a typical development land transaction, there continues to be a strong appetite for land in the Fraser Valley. Recent discussions with developers have had a generally positive sentiment, which is rooted in:
- A recognition that we came into this situation with a housing supply issue and that our current reality is likely only to create further delays in the delivery of new housing
- An understanding that government stimulus of this magnitude has a history of fueling the housing market in the economic rebound
- A belief that, as we come out the other side of this, banks will shift their focus from risk aversion and liquidity to deploying capital which should cause interest rates to drop
The positive sentiment isn’t just talk; our team spent March writing new offers, obtaining subject re-movals, completing deals and finding ample demand for new opportunities. It’s becoming apparent to many developers and investors that cash is not what you want to be holding during the inevitable inflationary period that follows this magnitude of quantitative easing.
Check out our curated summary of the Fraser Valley Real Estate Board’s March stats in infographics below.
View the Fraser Valley Real Estate Board’s entire stats package for March 2020 here.
This representation is based in whole or in part on data generated by the Fraser Valley Real Estate Board which assumes no responsibility for its accuracy.