The October stats are out from the Fraser Valley Real Estate Board. After 4-6 months of market deceleration, the rate of deceleration has moderated and the curve in many key metrics is flattening, for example:
- Average days on market has decreased for the first time in 4 months
- Sales have increased for all product types for the first time since the spring
- Sale price as a percent of original list price has been falling since March but the month-over-month decrease was markedly smaller in October, and in line with October 2016 and October 2017.
- Inventory has plateaued and even decreased mildly month-over-month for townhouses (down 0.3%) and detached homes (down 1.3%).
The deceleration of activity may be moderating but benchmark sale prices continue to decrease, inching closer to prices comparable to a year ago. For example, the benchmark price of a typical detached home in the Fraser Valley decreased another 0.2% this month placing it only 1.1% above October 2017’s benchmark price. Townhouses and condos have further to fall to meet last year’s benchmark prices but experienced month-over-month decreases of 1.4% and 1.3%, respectively.
What does this mean for development land in the Fraser Valley? We have seen a noticeable increase in the quantity of available development sites in the Fraser Valley and with this increased supply, there is far less urgency among buyers. Vendor price expectations have yet to change but land-owner’s term expectations are becoming more favourable for buyers. It is the buyer groups that are well capitalized with a long-term view that continue to bet (albeit more conservatively than before) on the strong underlying economics of the residential market in the Fraser Valley.
Check out our curated summary of the Fraser Valley Real Estate Board’s October stats in infographics below.