August 2022 Pre-Sale Real Estate Market Insights
THIS EPISODE IS NOW AVAILABLE IN AUDIO
In our September 2022 episode of the Fraser Valley Presale Pulse, President of MLA Canada, Ryan Lalonde, and Managing Director for the Fraser Valley, Brittany Reimer dive into the latest pre-sale and resale data that are affecting the real estate market today.
“We feel there is an optimistic opinion about the market in the coming months, with the summer market starting to settle and buyers find their bearings.”
– Brittany Reimer, Managing Director, MLA Canada Fraser Valley.
PRE-SALE DEMAND EASES IN THE FRASER VALLEY
We saw a pause in presale launch activity in August as the market continued to reconcile with uncertainty, while developers prepared for the Fall market. As the summer market has had time to settle, we’ve seen some increased confidence with savvy buyers seeking to take advantage of the market that we’re in. This was heavily reflected in the increased volume in the resale market last month and in the incredible interest, we have seen for certain projects, particularly in Surrey City Centre. Buyers are optimistic about the opportunity ahead to get the home they want, at a price point sharper than in the Spring.
While investors have been a dominant buyer group in the Fraser Valley over the last two years, we’ve seen a shift towards an investor and end-user hybrid. These buyers generally see their home investment and want to thoroughly understand what rental price is achievable but are still concerned with features, and specs, and plan to live in their homes at completion. Ultimately it is about finding value for Buyers, finding long-term investments that will yield long-term appreciation, and finding locations home buyers believe in the future.
There were a few notable project launches in the Fraser Valley for this month. Janda Group launched Aldergrove Town Centre’s third building, Creekside. This program includes 66 homes and is blending at approximately $800 PPSF. Since its release, it is tracking around 20% sold. When the program first launched, the first phase was blending at approximately $650 PPSF. We’ve seen the current phase blend at approximately $800 – a testament to how far prices have come in such a short time. This program is a game changer for Aldergrove and is a welcomed change and revitalization to the area.
Previewing on Pura by Adera also started this month, while teams prepare for its grand opening on September 24th. Pura is a really well-designed collection of one to two-bedroom + den urban homes with a huge focus on wellness and community. It is a program many people are talking about right now, with one of the biggest selling features being Adera’s Smartwood Technology – a sustainable Mass Timber construction method which matches the strength and durability of concrete. Homebuyers and investors are yielding comparable rental rates to concrete, yet the end price points are significantly lower, and this has really been the reason this program has received so much praise.
SALES TO LISTING RATIOS
As we continue to experience market pressures, especially those directly related to home ownership like rising interest rates, it is expected that the number of sales overall will also feel a decline. Fraser Valley had quite the rebound in the month of August as sales increased almost 2.5% from the previous month after four consecutive months of declined sales since of peak in March. Townhome products saw a 20% increase in sales from last month as well.
There was a significant change in active listings from August last year – over 40% more homes listed for sale. This is a testament to how constrained housing inventory was just twelve months ago. We witnessed an 8% drop month over month in inventory and are not expecting a rush of sales currently as sellers are not in a position where they need to sell and are willing to wait and see market conditions improve before listing their homes for sale.
Sales to listing ratio for the Valley - similar to Greater Vancouver – markets continue to gravitate towards more balanced conditions. Townhomes and Condos, however, sitting at 26% and 25% respectively are still in a Sellers Market although we anticipate this to cool down in the coming months. HPI Benchmark Prices for all product types continue to decline, with a four and a half percent dip month-over-month. Detached and townhome product was the most sensitive, decreasing by 5.1% and 3.9%, respectively. And finally, Apartment products faired the best with just a 2.1% decline.
For the latest real estate market data on Greater Vancouver, watch the latest video featuring Ryan Lalonde and Suzana Goncalves.
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