May 20, 2022 Fraser Valley May 2022 Pre-Sale Pulse

April 2022 Pre-Sale Real Estate Market Insights

THIS EPISODE IS NOW AVAILABLE IN AUDIO

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In our May 2022 episode of the Fraser Valley edition of the Presale Pulse President of MLA Canada Ryan Lalonde, and Managing Director for the Fraser Valley, Brittany Reimer sits down to give you the latest pre-sale and resale data, as well as some trends we are seeing in real estate across the Fraser Valley. 

“This time of year is usually bustling with activity, yet Fraser Valley sales dipped below the 10-year average for first time in nearly two years. Simmering sales in tandem with an increase in active listings is moderating the market in a way that’s encouraging for homebuyers.” – Ryan Lalonde, President, MLA Canada.  

PRESALE ACROSS THE FRASER VALLEY MARKET 

Last month, Prosper in Guildford pulled public focus, as they had sharp price points and incredible demand during the suite select process. They have now sold-out entirely at around $800 PPSF. We will watch closely for the launches of Hartley by Porte Homes in Surrey City Centre, and Silva by Wanson Group in Delta. The former of which is beginning previews in the next two weeks with plans to begin writing in June. 

In terms of concrete homes – Anthem has begun ad campaigns for Georgetown 2, which targets a younger, stylish demographic with 255 studio- to 2-bedroom units. District Northwest began sales on its North tower at the beginning of May, resulting in a fair turn-out. The first tower sold out at just under $1,000 PPSF, and the elevated prices on the new tower have brought the overall blend to $1,065 PPSF. 

Pura by Adera has seen a lot of interest, and for good reason. Brittany Reimer describes that Adera is "centrally located in Downtown Surrey, will be the FIRST SmartWood building in the market, and is backed by a developer with over 50-years in the business.”  

HIGHER INTEREST RATES CAUSE DEMAND TO DECREASE 

Higher interest rates have started to pull back on the demand on the resale market and with no signs of slowing down as the Bank of Canada stated that the economy is “moving into excess demand” and that “inflation is persisting well above target”. This is a clear signal that another 50-point basis increase is likely to occur by the next meeting, which is scheduled for June 1st. 

The Fraser Valley board reported approximately 1,600 sales in April, a 35% decrease from the previous month in what is typically a busy time of the year. This is the sixth-highest April in the past 10 years, meaning it has fallen only just under the 10-year average – despite the rate increases and government policy.  

April saw about 3,600 new listings, which is down 28% from the previous year and down 21% from the previous month. The dip in new listings was compensated for by the reduction in sales, which meant that active month-end inventory in April was up 15% from March, giving buyers a slightly larger selection to choose from.  

“It will be critical to watch in the coming months if these trends will continue, or if it is a temporary reaction to market uncertainty,” Ryan Lalonde states.  

One factor to consider is that as rates continue to rise, many buyers in the next few months may start to act on the advantageous rates they have already secured before the end of the hold period. 

SALES TO LISTING RATIOS IN THE FRASER VALLEY 

A slow-down in sales activity has led the sales-to-listings ratios to adjust from their historic highs. The ratio for all property types in April is currently sitting at 30%. While things have slowed, anything above 20% is still considered a Seller’s market. Condominium product continues to be the hottest selling product, with a sales-to-listing ratio of over 50%.