NOVEMBER 2022 FRASER VALLEY PRE-SALE REAL ESTATE MARKET INSIGHTS
"It looks like the tail end of the year finds the Fraser Valley housing market continuing to slow – the higher you fly, the harder you fall, and that seems to be a bit of the story this year in the Valley. However, finding some optimism in this market, opportunities are definitely present, as demonstrated by a few strategically well-positioned developments." Brittany Reimer, Managing Director, Fraser Valley
LISTINGS LAG AND BUYERS HESITATE THROUGHOUT THE FRASER VALLEY
In the Fraser Valley market, hesitation is the theme du jour as buyers and sellers have slowed activity ahead of the holiday season. November saw 839 residential resales, representing a 6.9% decline from the previous month and a 57.5% decline year-over-year. The market saw similar moderation in new listings as homeowners held off listing their properties, hoping for more favourable market conditions in the new year. The Fraser Valley recorded 1,703 new listings in November - down 22.1% from the previous month and down 18.8% year-over-year. While a slowdown in the resale market is typical for this time of year, the magnitude suggests that uncertainty over the near to mid-term outlook and the pressure of elevated interest rates continue to dominate decision-making in the market. As a result, the HPI benchmark price saw month-over-month declines of 2.2%, 1.3%, and 1.8% for single-detached, townhomes, and condominiums, respectively.
OPTIMISM LIES IN WELL-POSITIONED PRE-SALE PROGRAMS
There is some optimism to be found in this market when looking at the opportunities present in strategically well-positioned developments. High Street Village by Wall Financial, located in Abbotsford, is a development that has seen some success. The 12-acre development launched Building 1 in October and received considerable interest due to its accessible location and convenience to shopping. After less than a month on the market, Building 1 sold out at approximately $720 PPSF. The program is now selling Building 2 and took suite selection forms earlier this month. Like the previous release, Building 2 allocated over 90% of homes on the first weekend of previews. There is clearly a lot of latent demand in Abbotsford for presale products – which so far has been limited in this market compared to the high level of interest it has received over the past two years.
In Surrey, a similar story is being told at MLA Canada’s project – Pura by Adera. The program has seen strong absorptions, and the interest continues to grow, with over 100 out of 136 units sold in just over two months. Given the program's success, the project will see the release of Phase 2 soon. Another wood-frame product type in Surrey replicated similar success with the launch of Galilea by Whitetail Homes. Sales began for the South Building at the beginning of December, and of those 65 units, Galilea saw 57 go under contract - on the first day of the appointment. That’s really not at all the numbers the buyers would expect to hear if only listening to recent news headlines. The project benefited from strong pricing, with 1-Beds starting at $425k and 2-Beds at $680k, offering $20k off all homes during the opening weekend, which drove a lot of initial absorptions. Being close to the future UBC campus and King George sky train station is an attractive product for investors, in particular.
What’s evident in the Fraser Valley market is that climbing interest rates create natural advantages in the pre-sale products. The result is that even in a depressed resale market – well-positioned pre-sale product is still moving and moving fast. The ability to take advantage of strong incentive offerings and lock in today’s prices – while also avoiding the headache of current elevated interest rates – makes it a sensible investment for buyers.
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