July 2021 Fraser Valley Market Update

Real Estate Tips | August 14, 2021 | written by Dan

Prices remain strong, sales volumes are down and inventory is at historic lows
I hope you are having an incredible summer with friends and family. It is so nice to see some of the Covid restriction being lifted and life returning to some form of normalcy.
The first half of 2021 was characterized by rampant demand from buyers looking for more space as the reality of spending an inordinate amount of time at home set in. Inventory remained relatively low through this period and we saw the strongest Seller’s market we had seen in years. Prices appreciated rapidly and there were multiple offers on virtually every listing.
In the heat of it all we even saw subject free, sight unseen bully offers that challenged offer presentation days.
On more than one occasion I had the unfortunate task of calling my clients and explaining to them that the showing we had booked for Saturday or Sunday had been cancelled and if they wanted a chance at the house we were scheduled to see they would have to write a subject free offer that evening.
Now, in the second half of 2021, while the demand has cooled so has supply and we are seeing prices plateau.
Interest rates are still relatively low, checking RBC this morning the five year fixed is right at 2.49% and the variable rate is hovering just above 1.63%. Given the inflation being reported in the USA it will be interested to see how long we will have the rates we do.
Real-estate demand is inexorably linked to the supply and demand of mortgage debt, if there is a shortage of mortgages offered and the interest rates begin to climb we will inevitably see downward pressure on pricing.
Lets get into the numbers for the Fraser Valley;
MLS HPI Pricing
To start this discussion let’s look at the HPI pricing for the four housing classes we examine in the Fraser Valley; Apartments, Townhomes, Detached homes and homes with Acreage.
Apartments Pricing;
July 2021- $494,000
June 2021- $493,500
July 2020- $437,300
Townhomes Pricing
July 2021- $688,400
June 2021- $678,400
July 2020- $563,200
Detached Pricing
July 2021- $1,319,200
June 2021- $1,324,400
July 2020- $1,008,00
Homes with Acreage *rolling average pricing used no HPI index
July 2021- $2,563,787
June 2021- $2,494,102
July 2020- $1,885,858
My Interpretation 
Inventory remains very low, as much as demand has contracted slightly it has not contracted enough to balance the market given how much supply has shrank.
Sales to Actives Ratio (S/A)
Now let’s look at the Sales to Active ratio.  I love the sales to actives ratio as a metric to determine the speed of the market and who is favoured in specific housing classes.  If the sales to actives ratio is between 12% & 20%, we define this as a balanced market.  Less than 12% favours the buyer, greater than 20% favours the Seller.
Apartments (S/A)
July 2021- 47.6% (seller’s market)
June 2021- 46.6% (seller’s market)
July 2020- 22.7% (slight seller’s market)
Townhomes (S/A)
July 2021- 65.9% (seller’s market)
June 2021- 67.3% (seller’s market)
July 2020- 42.5% (seller’s market)
Detached Homes (S/A)
July 2021- 37.5% (seller’s market)
June 2021- 35% (seller’s market)
July 2020- 31.1% (seller’s market)
Homes with Acreage (S/A)
July 2021- 17.1% (balanced market)
June 2021- 17.4% (balanced market)
July 2020- 20.4% (slight seller’s market)
My Interpretation
As stated previously as much as demand has contracted so has supply. We will see in the coming sections that transaction volumes and active listings have come down substantially compared to the volumes we had seen in the spring. “Normal market” behaviour for the summer months is to see a slowdown but given the “Covid factor”
I think it was relatively easy to predict that the market would cool to some extent in terms of volume of listings and transactions. Prices seem to be holding strong.
Active Listings
Quite simply, active listings are the number of homes for sale in a given housing class across the Fraser Valley.
Total Active Listings
July 2021- 4407
June 2021- 5182
July 2020- 6525
July 2021- 1169
June 2021- 1319
July 2020- 1863
July 2021- 725
June 2021- 839
July 2020- 1306
Detached Homes 
July 2021- 2040
June 2021- 2509
July 2020- 2781
Homes with Acreage 
July 2021- 362
June 2021- 374
July 2020- 393
Aggregate inventory across every housing class is low which, coupled with low interest rates is contributing to the market continuing to favour the seller across most housing classes, prices remain strong.

The number of transactions in a given housing class.
July 2021- 557
June 2021- 615
July 2020- 423
July 2021- 478
June 2021- 565
July 2020- 555
Detached Homes 
July 2021- 764
June 2021- 878
July 2020- 865
Homes with Acreage 
July 2021- 62
June 2021- 65
July 2020- 80
While demand has shrank marginally when compared to historic norms it is not enough to shift the market back in favour of the buyer.
New Listings
Listings that came onto the market in a given month.
July 2021- 679
June 2021- 839
July 2020- 865
July 2021- 543
June 2021- 700
July 2020- 808
Detached Homes 
July 2021- 848
June 2021- 1150
July 2020- 1395
Homes with acreage
July 2021- 103
June 2021- 123
July 2020- 119
Across all housing classes we are seeing lower volumes of new inventory hitting the market compared to historic norms (even for the summer). The only assumption I can draw is that most of the folks who intended to sell, did and/or the lifting of Covid restrictions has quelled the sense of urgency to upgrade.
Where I see the biggest opportunity right now-
I think upgrading from a townhouse to a detached home could make a lot of sense. You will be selling in the strongest market and buying into the second softest.
It is really hard to predict what will happen with our Real estate market, unfortunately I don’t have a crystal ball. If you have one please reach out I would be happy to buy it from you!
There has been a lot of prediction around the 2020s mirroring the 1920s in some ways as restrictions are lifted and we get this pandemic behind us. If this happens I can only imagine that there will be continued upward pressure on pricing.
It will also be interesting to see how life goes back to normal work wise as well. Most businesses are now so accustomed to the work from home situations established as a result of the pandemic. If these trends continue it is an obvious prediction that families will look to the Fraser Valley to find more space, commuting from Chilliwack to Vancouver 1 or 2 days a week is a much better proposition than 5 days a week obviously.
Over the last 18 months I have had the priviledge of helping several families relocate from Vancouver and the surrounding areas to Abbotsford and Chilliwack. I would imagine that the exodus from Vancouver will continue if folks are allowed to work from home most days.
Thanks for reading this, I really appreciate your time. If I can ever be of service or if you simply just want to talk Real-estate or bounce an idea off of me please don’t hesitate to call, text or email.
Have a fantastic day
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