The September housing market statistics are out from the Fraser Valley Real Estate Board and the impact of rising interest rates and perceived likelihood of a recession can be seen in the month’s activity.
Sale price as a percent of original list price saw minimal change month-over-month with detached homes increasing by 0.6%, followed by townhomes and condos decreasing by 0.6% and 0.2% respectively. Days on market for detached homes saw an increase of just 3%, however, condos and townhomes spent far more time on the market than in August (15.4% and 28% respectively). This slowdown in sales is due in part to interest rate hikes, but also likely because buyers are being cautious and waiting for the market to stabilize before making a purchase.
Benchmark prices across all property types have been under pressure due to weaker home buyer demand. Since this past spring, prices have been on a slow but continuous decline and, in the case of detached homes, are already at levels comparable to October 2021. Benchmark pricing for September was as follows:
- Detached Homes: $1,462,000 (- 3.4% MoM)
- Townhomes: $822,400 (- 2.3% MoM)
- Condos: $530,400 (- 2.1% MoM)
New listings increased across all product types for the first time since March, helping active listings end the month 67% above September 2021 levels. Meanwhile, sales decreased month-over-month, ending at 53% below last September.
What does this mean for development land?
The stare-off continues in the development land market. As pressure on overleveraged land owners & sellers ramps up, many buyers believe that prices will soften and terms will relax further. Previously, we have talked about “buying the dip,” and most developers we’ve spoken to feel that opportunity is still ahead of us. The sentiment that the market is in its early stages of decline seems to be widely shared, but how low will it go? That question is up for debate. One thing is for certain: as prices across all product types continue to decline, pricing development land becomes more challenging. Getting consensus on a proforma isn’t as automatic as it once was as revenue assumptions are polarizing depending on whether they’re being conducted by the buyer or seller’s agents.
View the Fraser Valley Real Estate Board’s entire stats package for September 2022 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.