May 2020-Market Update

Market Updates, Resources | June 11, 2020 | written by Dan

I hope you’re enjoying the beautiful weather we are having.  I find, for my family anyway, this pandemic is a lot more bearable when the sun is shining, and the birds are chirping.
The month of May followed a lot of the same trends as April in terms of a massive slowdown compared to historical figures of what we typically see during the Spring market.  This being stated we are showing signs of recovery and anecdotally it feels like the buyers and sellers I am working with are more comfortable operating under our new “normal” than they were at the end of march and through April.
To best interpret the impacts of Covid-19 on the real estate market and how our market is trending I thought it would be valuable to compare May 2020 to April 2020 directly and then compare May 2020 to May 2019 to examine how things have changed from exactly one year ago.
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;
May 2020- $389,900
April 2020-$370,000
May 2019-$370,000
Townhomes Median Pricing
May 2020- $570,000
April 2020-$575,000
May 2019-$570,000
Detached Median Pricing
May 2020- $956,500
April 2020-$970,00
May 2019-$923,500
Homes with Acreage
May 2020- $1,450,000
April 2020-$1,446,000
May 2019-$1,700,000
My Interpretation
The data is becoming a little skewed because the sample size month over month is a lot smaller than it typically would be, for example in a typical May market we would have seen somewhere around 600 transactions for the detached market alone.  In May of 2020 we saw only 290 transactions in the detached space which represents a 52% slow down. I think looking at some of the other ratios in combination with price will help make this discussion more relevant.
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)
May 2020- 13.1% (balanced market)
April 2020- 10.5% (buyer’s market)
May 2019- 22.5% (seller’s market)
Townhomes (S/A)
May 2020- 21.8% (seller’s market)
April 2020- 20.3% (seller’s market)
May 2019- 26.6% (seller’s market)
Detached Homes (S/A)
May 2020- 12.4% (balanced market)
April 2020- 12% (balanced market)
May 2019- 15.8% (seller’s market)
Homes with Acreage (S/A)
May 2020- 8.3% (balanced market)
April 2020- 4.2% (buyer’s market)
May 2019- 6.9% (seller’s market)
My Interpretation
The market is holistically shifting towards a balanced or buyer’s market.  It makes sense to me that the condo market has been impacted the most as a result of the pandemic, with the BC state of emergency still in effect selling tenanted condos is functionally impossible as tenants can still outright refuse showings and can stop paying their rent without being evicted.  This is causing investors to be reticent not only to take on an existing lease but to purchase an investment and bring in a new tenant.  From my anecdotal experience working with buyers in this market the townhouse market is palpably the most active, it feels like any townhome priced well is selling quickly and close to list price and that is corroborated by the data here as the townhouse market remains the only subset still classified as a seller’s market.
Active Listings
Quite simply, active listings are the number of homes for sale in a given housing class across the Fraser Valley.
May 2020- 1461
April 2020- 1426
May 2019- 1759
May 2020- 1022
April 2020- 984
May 2019- 1529
Detached Homes
May 2020- 2341
April 2020- 2208
May 2019- 3522
Homes with Acreage
May 2020- 375
April 2020- 378
May 2019- 508
In response to the pandemic people are simply not listing their homes at the same frequency they normally would.  Inventory across all property classes is down approximately 29% based on historical spring markets.
The number of transactions in a given housing class.
May 2020- 191
April 2020- 150
May 2019- 395
May 2020- 223
April 2020- 200
May 2019- 406
Detached Homes
May 2020- 290
April 2020- 266
May 2019- 557
Homes with Acreage
May 2020- 31
April 2020- 16
May 2019- 35
We are seeing more transactions in May over April across every housing class. People who need to move or see opportunities are still moving forward, I feel as people are spending more time at home than ever before there is more pressure on townhomes (generally purchased by people upgrading from a condo or rental accommodation) and homes with acreage.  I think folks are generally more likely to push their purchase further east so they can get more space rather than buying a smaller home closer to the city.
New Listings
Listings that came onto the market in a given month.
May 2020- 519
April 2020- 373
May 2019-765
May 2020- 502
April 2020- 303
May 2019-813
Detached Homes
May 2020- 856
April 2020- 505
May 2019- 1410
Homes with Acreage
May 2020- 88
April 2020- 57
May 2019- 157
When the pandemic first happened it was very scary, people saw huge losses to their stock portfolios and in general put all plans on hold.  As we are beginning to understand our new normal and some restrictions are being lifted folks are beginning to execute the plans they had before this whole situation unfolded.
Where I see the biggest opportunity right now-
 It is really hard to say how the real estate market is going to respond holistically to the pandemic.  There are still so many what ifs? There are some dooms day predictions floating around like the report CMHC published;
that are predicting home prices to fall by 9%-18% overall.  I think in the lower mainland and into the Fraser Valley specifically this is a pretty dire prediction and the article even mentions that BC is likely to be more insulated.
What I am seeing in the stats and feeling in the field is the market is slowly recovering and although prices have softened a little, they are still relatively stable. I don’t have a crystal ball and I certainly can’t predict what will happen if there is a second wave and we lock the economy down again.
My feeling is that if you have been considering selling your townhome (or entry level detached home) and upgrading to a single-family home now is as good a time as any.  You will be selling in a seller’s market and buying in a buyer’s market.  I think as inventory continues to grow in the detached segment, we will experience the first true buyer’s market there for many years.  I think there will be continued demand for townhomes and entry level detached. Space (both inside and out) has never been so desirable.
I hope this update has brought some value you to you.  If you have any questions about what is happening in our market I am always available for a chat.
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