The Fraser Valley Real Estate Board’s May statistics are out and they confirm the shift we speculated began last month with the single family segment: the market is decelerating. In May we saw the townhome market follow suit with a reduction in the rate at which prices are climbing, increased days on market and a drop in the sale price as a percent of list price. Don’t misinterpret this though – this isn’t a declining market, it’s simply the beginning of a shift towards a more balanced but strong, market.
Month-over-month, total sales declined slightly but they remained at record numbers and ended the month nearly 60% above the 10 year average for May. Single family and townhome sales began declining a couple of months ago but condo sales, which tend to lag, are still reporting increases for now.
The condo segment lagged in days on market as well, with single family and townhome seeing increases (slower sales) this month but condos selling, on average, 2 days faster than last month.
Market deceleration is also evident in the sale price as a percent of original list price with decreases for all major home types, returning the ultimate selling price to values much closer (but still above) the list price.
Compared to April, active listings declined by 3-4% for all major home types. This isn’t a significant drop but it’s a month earlier than would normally be expected coming out of the Spring market. New listings also peaked early this year, which, combined with active listings that are already historically low, will exacerbate the supply issue and maintain upward pressure on prices.
What does this mean for the development land market in the Fraser Valley?
It’s become evident that the residential market has peaked, at least for now, and the land market is displaying similar characteristics. The frenzy is over and there are certainly fewer transactions occurring; however at least some of that is caused by a lack of available sites – the low supply could be causing, or at least exaggerating, the perceived slow down.
Development land buyers have returned to more disciplined behaviour, expecting due diligence time to cross t’s and dot i’s. General market sentiment among purchasers remains positive with expectations the market will maintain strength and likely pick up again once immigration begins to flow.
The mild softening in the land market could make this summer your opportunity to quietly acquire your next site before the market takes off again. Yes, the inference to be had there is I believe this easing is only temporary.
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 2021 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.