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

May 2022 Pre-Sale Real Estate Market Insights

THIS EPISODE IS NOW AVAILABLE IN AUDIO

Listen on your favourite audio streaming platform: Apple, Spotify, Amazon Music, iHeart Radio

In our June 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. 

“There was a massive tidal wave of buyers that drove up market demand for the last 24 months, a tidal wave that we have never seen before in the history of real estate. As we would expect any tidal wave to do, it is receding.  Interest rate hikes play a big role in that, as well as more available inventory, and value of offering on both the pre-sale and resale side in Metro Vancouver have contributed to this shift in the Fraser Valley. ” – Brittany Reimer, Managing Director, MLA Canada Fraser Valley.  

PRESALE ACROSS THE FRASER VALLEY MARKET 

Strong, appreciating price points have been a major attractor to this market. Over the past 12 months, we have not seen inventory ease into the market. Instead, inventory surges, sells out, and the market builds. And investors scramble for the next launch. Sense of urgency appears to be just as much as a driver as affordability and we are witnessing that shift quickly today.  

Last month we mentioned that we were watching the launch of Silva by Wanson in Delta closely. This project sold out of all 100 units in its first building within the first month of sales with a highly anticipated release of 78 units in its second building on the horizon. We suspect it to sell-out in a similar fashion to the first building. This indicated demand in the Surrey and Delta markets remain extremely strong.

We will be watching closely for the sales campaigns of Hartley by Porte Homes in Surrey and Park & Maven by Jayen Properties in Langley. Both of these are wood-frame projects are really emphasizing their proximity to current and future skytrain access. It seems that the appetite from investors for product near transportation is very much still strong, and we expect these projects to see a strong outcome. 

The higher you climb, the harder you fall

Fraser Valley home prices saw a 40%-50% increase over the past 18 months, it was only a matter of time before we saw a shift in momentum. As prices soared and inventory has been at an all time low, buyers considered South of the Fraser, ultimately allowing the Fraser Valley market to reach price parity with Greater Vancouver in many product types for the first time ever in history. As these market fundamentals have shifted, we‘ve started to see the relationships between markets change. 

In terms of resale, we are now seeing the reverse in action: the Fraser Valley market is starting to decline at a faster pace than Greater Vancouver.  Homes that are rare in offering or renovated on big lots, are moving well, townhomes much slower, and condos likely to see the same trend through the summer. We expect this trend to continue as inventory levels in Greater Vancouver bounce back and as more workers gradually return to offices. However, we do expect winners – condominium product will continue to be the key entry for home buyers into the housing market.  

SALES TO LISTING RATIOS IN THE FRASER VALLEY 

Much like in Greater Vancouver, sales activity is moderating in the Valley. Compared to the record month of last year, the May sales activity was down by over 50%. We are now much closer to historical levels than we have been in a long time during this recent run-up. Supply meanwhile, is nearly three times higher than the lows experienced in December 2021. The sales-to-listings ratio, which is a good indicator of the kind of market we are in, sits at about 22%, signalling we remain in a tight market for buyers.