Whether it is the relaxation of public health restrictions or just a growing comfort with a new normal, home sales in the Fraser Valley picked up in May. Supply and demand continue to grow in tandem, maintaining a level of stability in the market, particularly in home prices.
May’s statistics show month-over-month increases in sales for all residential home types. Townhome sales increase by 12%, detached homes by 9% and condos by 27%. Despite these increases, total sales volume is less than half the 10 year average for the month of May.
New listings in May were down as much as 39%, depending on home type, over this time last year contributing to total active listings holding steady at 73% of the 10 year average for the month. Sellers do seem to be gaining confidence in the market though, as active listings rose between 8 -11% over last month, depending on home type.
Average days on market increased for both attached home types but decreased again for detached homes, from 33 days down to 31 days. Sale price as a percent of list price increased 1.3% for condos and held relatively flat for townhomes and detached homes. Combined, these metrics point towards steady demand among consumers and healthy competition on listings.
We always report on HPI Benchmark prices but investigation into a discrepancy in the data has revealed the National MLS HPI operations group has adjusted historical pricing following their annual review. This has skewed month-over-month price comparisons, particularly for condo prices, so take any month-over-month price changes with a grain of salt. With that said, all home types are still above the Benchmark Price from May of last year. Condos lead that charge with a year over year increase of 4.1%., detached homes were up 2.7% and townhomes were up 1.7%.
What does this mean for development land in the Fraser Valley?
The pickup in the Fraser Valley real estate market and the reopening of businesses has been a shot in the arm for the Fraser Valley land market. It hadn’t slowed much to begin with but starting mid-May we experienced a noticeable increase in development land inquiries from developers and builders looking to secure their next development site. Purchasers are, however, still very cautious. They are focusing primarily on well-located sites with minimal challenges and are looking to obtain much longer due diligence periods to allow time for a more thorough investigation.
The ability to finance a land purchase is a chief concern among purchasers, many of who won’t consider deals that require a completion this year. The other side of that coin is a buying opportunity for the seemingly shorter list of developers that are not facing financing challenges, either as a result of experience level, long-standing relationships with key lenders, available cash or a combination of those factors.
In general, land prices tend to be slow to change so it’s not surprising we haven’t seen movement in the past 3 months and with the current stability in end product pricing, we may not see the reduction in land values that many are hoping for. That being said, there are certainly more development sites to look at now than there were pre-COVID and the terms buyers are able to obtain are beginning to reflect the current, more cautious, environment.
Check out our curated summary of the Fraser Valley Real Estate Board’s May stats in infographics below.
View the Fraser Valley Real Estate Board’s entire stats package for May 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.