Median Pricing
To start this discussion let’s look at the median pricing for the four housing classes we examine in the Fraser Valley; Apartments, Townhomes, Detached homes and homes with Acreage.
Apartments Median Pricing;
June 2020- $385,000
May 2020-$389,900
June 2019-$381,500
Townhomes Median Pricing
June 2020- $579,900
May 2020-$570,000
June 2019-$569,250
Detached Median Pricing
June 2020- $970,000
May 2020-$955,000
June 2019-$936,000
Homes with Acreage
June 2020- $1,685,750
May 2020-$1,450,000
June 2019-$1,372,500
My Interpretation
I think there is some pent-up demand. There were a lot of people who had plans to make a move choose not to move forward because of the pandemic. They either lost sources of income or became bearish on the Real estate market because they thought the market would depreciate at an unprecedented rate. Now that things are normalizing a lot of these folks are coming back into the market and either listing their home or purchasing or both.
I think apartments will be slower to respond to these changes as they are the asset class that will be most affected by the changes to the residential tenancy act, now that some of those restrictions have been lifted it will be interesting to see how that subset of the market responds.
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)
June 2020- 25.1% (seller’s market)
May 2020- 12.5% (buyer’s market)
June 2019- 19% (buyer’s market)
Townhomes (S/A)
June 2020- 37.8% (seller’s market)
May 2020- 20.8% (seller’s market)
June 2019- 20.9% (seller’s market)
Detached Homes (S/A)
June 2020- 25.7% (seller’s market)
May 2020- 11.9% (buyer’s market)
June 2019- 13.8% (balanced market)
Homes with Acreage (S/A)
June 2020- 12.9% (balanced market)
May 2020- 8.1% (buyer’s market)
June 2019- 7.9% (seller’s market)
My Interpretation
The market is holistically shifting towards a seller’s market with the biggest demand being for townhomes. If you own a townhome and have been thinking about moving up to a detached home now is a good time as we are experiencing a very strong market for townhomes right now. I think the data on condos is skewed low because of the practical unsalability of rental condos for the majority of the month, some restrictions were lifted on June 26th. There was a lot of inventory on MLS that makes these ratios appear softer that was unsalable because of the restriction in the residential tenancy act.
I think we will see a positive shift toward the seller for condos in June.
Active Listings
Quite simply, active listings are the number of homes for sale in a given housing class across the Fraser Valley.
Apartments
June 2020- 1621
May 2020- 1531
June 2019- 1725
Townhomes
June 2020- 1193
May 2020- 1073
June 2019- 1560
Detached Homes
June 2020- 2559
May 2020- 2432
June 2019- 3632
Homes with Acreage
June 2020- 389
May 2020- 385
June 2019- 504
Interpretation
Our aggregated inventory is still historically low which is part of the driving force behind the market shifting holistically to a seller’s market. As we will see in the coming section, “Sales” the amount of transactions are returning to relative normal levels faster than sellers are responding to or feeling comfortable with listing and selling their home through this market.
Sales
The number of transactions in a given housing class.
Apartments
June 2020- 407
May 2020- 191
June 2019- 328
Townhomes
June 2020- 451
May 2020- 223
June 2019- 326
Detached Homes
June 2020- 656
May 2020- 289
June 2019- 502
Homes with Acreage
June 2020- 50
May 2020- 31
June 2019- 40
Interpretation
Buyer’s appeared to be more willing to move through the pandemic than sellers were. With the number of transactions returning and exceeding that of the historic norms and very low aggregate inventory the market is shifting rapidly to a seller’s market. What has yet to be seen is that if this is a function of pent up demand or if these are true markers of a shift that is happening in the market. At the end of February, it appeared we were going to have a very strong market in 2020; has the pandemic simply pushed that back by a few months or are we seeing pent up demand?
If you have a crystal ball, I would like to purchase it from you 😉
New Listings
Listings that came onto the market in a given month.
Apartments
June 2020- 818
May 2020- 502
June 2019- 504
Townhomes
June 2020- 816
May 2020- 519
June 2019- 628
Detached Homes
June 2020- 1343
May 2020- 855
June 2019- 1177
Homes with Acreage
June 2020- 104
May 2020- 89
June 2019- 90
Interpretation
While the aggregate of inventory is still historically low Sellers are deciding to get their homes on the market in more volume than historic norms. It will be interesting to see how fast the aggregate of inventory returns to normal and whether this will put downward pressure on the sales to actives ratio.
Again, I need that crystal ball!
Summary
Where I see the biggest opportunity right now-
If you have been considering upgrading your townhome to a detached home now is a great time to do so. While you would still be buying into a seller’s market in attached homes, it is a very strong market for townhomes right now.
If you have been considering buying a little piece of heaven and selling your detached home, it is also a good time as the market for detached homes is very active.
While condos appear to be the weakest asset class by the statistics, I feel we will see an uptick in transactions through July. Most people’s investment property is a condo so the changes to the residential tenancy act affected these homes the most. If you have been considering selling you condo it may be a good time to get on the market as investors will likely be more willing to purchase as we come out of this pandemic. While you can evict a tenant if you sell a condo you still can’t evict a tenant for not paying their rent so they still may be reticent.
Buying through this market also sense. While volumes are picking up the sales prices haven’t followed suit in a material way and interest rates are near all-time lows with five-year fixed rates going for as low as 2.44% and variable rates at 1.75%. If you find a home you love I wouldn’t hesitate to move forward.
I would however be afraid of investing in real estate now with the intent to move a tenant in. While some of the landlord’s rights have been reinstated you cannot evict for cause, ergo tenants not paying their rent.
If you find the right flip opportunity that may be a different story.