Things Can’t Rise Forever
The first month of 2022 was as seamless a transition into a new year as I’ve ever seen. When it comes to real estate, the market didn’t get the usual Christmastime slow down, it just kept going at record breaking speeds right into January and now into February. It’s funny, it was so seamless that I didn’t even notice the headline I wrote in last months newsletter still said 2021, not 2022. It’s even funnier that none of you noticed either. Typically, I receive several emails in response to this newsletter and last month was no different. In fact, last month’s letter developed 17% more overall engagement compared to the 2 year average, but there was no mention of a blatant error in headline.
There’s your irrelevant tidbit for the day. Now to business. This month I thought it would be useful to show you the meat of the Fraser Valley market. Like I already said, nothing has really changed over the past month. Inventory is still very low and demand is still historically high which is continuing to push prices up. Here’s what that actually looks like:
I encourage you to click those links and see for yourself some of the things you may be hearing about. For context, the Fraser Valley numbers cover White Rock, Surrey, Delta, Langley, Aldergrove and Abbotsford. If there’s a particular city or type of home you’re interested in seeing these numbers for, let me know and I can pull the numbers in a jiffy.
Something to note when you view the graphic above is that the apartment category is lagging behind in the increase in prices year over year. The gap in price between a house and a condo has gotten larger. This being the case, in the past month and to this day, condos have been the toughest category to buy in. Simply based on the flow of sales, condos are now the hottest ticket item on the market. The same thing happened between 2016 and 2018 in the last boom. After the initial spike in detached houses and townhouses, condos were the last to explode. Evidently, we are in the middle of this happening again.
Looking Forward
It’s been amazing to watch the market move the way it has over the past 12 months. Week by week it changes. The reason for that is most sales occur on Monday or Tuesday. After those sale prices are released, it sets the new precedent for the next Monday / Tuesday crop of sales. Condos have been making jumps every week for the past 6 weeks or so. However, inventory is beginning to rise. Just in this first week of February, there has been a remarkable influx of new listings, so instead of 30 buyers fighting over 3 listings, there’s 10 to fight over. The numbers are still a long way from being in favour of the buyer, but it is trending that direction (literally based on the past 3 days of activity).
Are we approaching balance and a plateau in price? Well, we’re closer to it now compared to a month ago, but like I said, things have been changing so quickly it’s a bit silly to predict. What I can say is that the environment won’t get better to sell, so now is the time. From a buyer perspective, we’re not on the verge of a price drop by any means, but with the short term trend of new listings flooding the market, it may be time to re-energize and play your hand while you have it.
Are we approaching balance and a plateau in price? Well, we’re closer to it now compared to a month ago, but like I said, things have been changing so quickly it’s a bit silly to predict. What I can say is that the environment won’t get better to sell, so now is the time. From a buyer perspective, we’re not on the verge of a price drop by any means, but with the short term trend of new listings flooding the market, it may be time to re-energize and play your hand while you have it.
The Telling Sign
Without getting too analytical, a simple tell of whether or not the market is about to turn is found in the current presale environment. A year ago, many in the industry were recommending pre sales as an option to avoid competing against other buyers. I think I recommended it myself. Now, a presale is even harder to buy than anything else. The reason is because it’s literally a lottery. This is not an exaggeration:
Pre sale condos have thousands of people who enter their names as ready and able buyers, but in most cases there are less than 100 homes available. So, thousands of people are trying to get their hands on 100 products. The solution brought forth by developers is a lottery. Everyone who loses the lottery will have to continue looking. This is why I can’t imagine values dropping anytime soon.
Stats PackThe one thing that keeps people talking these days is interest rates. In January, the Bank of Canada announced they are holding the overnight rate at 0.25%. However, the indicators tell us that at the next announcement, an increase should be expected. We’ll find out in March, but until then, all we can do is speculate. My problem with this is that people have been speculating all kinds of things throughout these last 2 years, mostly with great inaccuracy. So, take what you hear with a grain of salt.
My best advice is to collect information from many sources, experts and historical data and create your own conclusions. Don’t rely on what I say as fact (as if I need to tell you that), but do use the information here and out there to form your own philosophies and approaches to different scenarios. Even the Mandalorian has to implement some Jedi philosophies to best deal with his friend Baby Yoda.
My best advice is to collect information from many sources, experts and historical data and create your own conclusions. Don’t rely on what I say as fact (as if I need to tell you that), but do use the information here and out there to form your own philosophies and approaches to different scenarios. Even the Mandalorian has to implement some Jedi philosophies to best deal with his friend Baby Yoda.
As For Me
As for me, I’m just trying to stay as prepared as possible for every scenario this market can throw my way. My service continues to evolve based on the state of the world and my experiences. As a REALTOR®️ in this market, I have to do a lot of work without compensation. It’s the nature of working with buyers these days. I view it as opportunity to get better and create new strategies. Every contract I write, whether accepted or not, is another tool to use for writing the next one. Yes, most of the time the best contract is the one with the highest number attached to it, but 1% of the time it’s not. Why not gain that 1% edge?
I’ve also published a new personal website at codystephenson.ca. It’s quite an improvement on my old one, with many more tools and uses for myself and my clients. Check it out and let me know what you think!
Beyond that, I take Dancer for a long walk every day, eat sushi with regularity and hit the gym with Christina 6 days a week. I started reading a book I got for Christmas too but Dancer ate it before I could finish chapter 1, so I’m currently accepting Indigo gift cards.
Until next time,
Cody
(778) 809-9214
cody@codystephenson.ca
I’ve also published a new personal website at codystephenson.ca. It’s quite an improvement on my old one, with many more tools and uses for myself and my clients. Check it out and let me know what you think!
Beyond that, I take Dancer for a long walk every day, eat sushi with regularity and hit the gym with Christina 6 days a week. I started reading a book I got for Christmas too but Dancer ate it before I could finish chapter 1, so I’m currently accepting Indigo gift cards.
Until next time,
Cody
(778) 809-9214
cody@codystephenson.ca