Significant Price Increases on Detached Homes Create Domino Effect on Townhouse & Condo Sales

DEMAND IN THE FRASER VALLEY EXTENDS TO TOWNHOMES AND APARTMENTS:
SURREY, BC – Consumer demand for real estate in the Fraser Valley continued through May, with overall sales once again reaching record-breaking numbers for the month historically.
The Fraser Valley Real Estate Board processed 2,911 sales on its Multiple Listing Service® (MLS®) in May, an increase of 47.8 per cent compared to May 2015. The previous record for sales processed in a May was set in 2006 at 2,245. However, sales dropped two per cent when compared to April 2016, continuing a slight trend of easing off since sales peaked this spring at 3,006 sales in March.
Of the 2,911 sales processed in May, 615 were townhouses and 557 were apartments, representing a significant portion of May’s market activity and a large increase when compared to May 2015. Townhome transactions increased 56.1 per cent when compared to last year, and apartments reached even higher levels seeing a 112.6 per cent gain.
Charles Wiebe, President of the Board, said of this month’s market data, “Demand is tremendous, still, for detached homes in our region, but it’s encouraging to see that the upward pace of that demand is leveling off.
“However, we’re also seeing the ripple effects as consumers are looking to townhomes and apartments in record numbers. This year, so far, is the busiest those markets have ever been.”
The Board received 3,674 new listings in May, an increase of 22.9 per cent compared to May of last year, and a 6.8 per cent decrease from April 2016. The total active inventory for May was 5,752, down 32.4 per cent from last year’s 8,512 active listings.
Across Fraser Valley, the average number of days to sell a single family detached home in May 2016 was 16 days, compared to 31 days in May 2015.
The MLS® HPI benchmark price of a Fraser Valley single family detached home in May was $834,200, an increase of 38.3 per cent compared to May 2015 when it was $603,100.
In May, the benchmark price of townhouses was $365,000, an increase of 20.4 per cent compared to $303,100 in May 2015. The benchmark price of apartments also increased year-over-year by 17 per cent, going from $192,500 in May 2015 to $225,200 in May 2016.

Mortgage rates are down and the local real estate market takes another hit. We are passing the mid-point of the year most homeowners at this point are very aware of the down turn we are experiencing in the local real estate market. Inventory has climbed and sales have fallen. Property values are headed down and as much as some would call it a balanced market, it’s more of a buyers’ market. Of course, there are few exceptions to this. Vancouver area homes sales posted their weakest June in almost twenty years. “We’re continuing to see an expectation gap between home buyers and sellers in Metro Vancouver,” said Ashley Smith, REBGV president. “Sellers are often trying to get yesterday’s values for their homes while buyers are taking a cautious, wait-and-see approach.” To take a closer look at the stats, click here Selling property in this market is challenging and requires a skillful realtor. Hard work often pays off, but in these conditions; it’s more about price and affordability. Buyers are taking advantage of these conditions and ‘low ball offers’ are becoming the norm. Sellers should prepare themselves and understand that it will likely take additional time to sell their home. When it comes to selling successfully there are few things that can help in delivering great results. Click here to ask me. Mortgage lending conditions are not much better. The good news is that interest rates have fallen since the beginning of the year and 5 year fixed is now as low as 2.74%. Most economists think fixed rates should hold steady and that we should see the prime lending rate move lower later this year. Borrowers looking to access these cheap rates should ensure they have all income taxes up to date and if you are self-employed ensure you have updated financial statements. This will help get you the answer you need quickly. Alternatively, if you need funds quickly and cannot meet the stringent lending criteria; then there are lots options but it comes at a higher cost. Mortgage rates: (certain conditions apply): Best 5 year fixed: 2.74% - insured Best 5 year fixed: 2.79% - uninsured Best Variable: Prime – 1% Best 10 year fixed: 3.44%