Home Sales Decline as Inventory Rises
Hello Solutions Real Estate Group Community,
Welcome to our latest blog update, where we bring you the freshest insights into Metro Vancouver’s and Fraser Valley’s real estate markets. May has been a month of significant changes that could influence your buying or selling decisions.
Supply: Rising Inventory in Both Regions
One of the most notable trends this month is the significant increase in the number of homes available for sale in both Metro Vancouver and the Fraser Valley.
In Metro Vancouver, according to the Greater Vancouver REALTORS® (GVR), there are currently 13,600 properties listed on the Multiple Listing Service® (MLS®). This represents a substantial 46.3% increase compared to May 2023. Additionally, 6,374 properties were newly listed in May 2024 alone, which is a 12.6% rise from the previous year and a 7% increase compared to the 10-year seasonal average.
In Fraser Valley, the situation is equally dynamic. The Fraser Valley Real Estate Board (FVREB) received 3,926 new listings in May, an increase of 78% compared to last year, although this marks a 22% decrease compared to April 2021. The month ended with total active inventory sitting at 5,868, a 3% decrease compared to April, and 9% less than May of last year.
This rise in inventory is good news for buyers, as it means more options and potentially more negotiating power. For sellers, it suggests a need to be more strategic with pricing and marketing to stand out in a more crowded market.
Demand: Sales Slowdown in Metro Vancouver vs. High Demand in Fraser Valley
In Metro Vancouver, residential sales totaled 2,733 in May 2024, which is a 19.9% drop from May 2023 and a 19.6% decrease from the 10-year seasonal average for May. Andrew Lis, GVR’s director of economics and data analytics, attributes this slowdown to various factors such as higher borrowing costs, economic concerns, and policy changes.
Conversely, Fraser Valley continues to experience extraordinary demand. The FVREB processed 2,951 sales in May, an increase of 267% compared to May 2020 and only a slight 2% decrease compared to April 2024. This near-record high is indicative of the intense buyer interest in the region, driven by increased inventory and ongoing demand.
Prices: Steady Increases Across Both Markets
Despite the slowdown in sales in Metro Vancouver, home prices have continued to see modest increases across different property types:
Metro Vancouver Detached Homes: The benchmark price is $2,062,600, reflecting a 5.9% increase from May 2023 and a 1.3% rise compared to April 2024.
Metro Vancouver Apartment Homes: The benchmark price is $776,200, a 2.2% increase from May 2023.
Metro Vancouver Attached Homes: The benchmark price is $1,145,500, showing a 5.2% increase from May 2023.
In the Fraser Valley, price increases have been even more pronounced:
Fraser Valley Detached Homes: The benchmark price is $1,323,300, up 2.3% from April 2021 and a significant 33.6% increase from May 2020.
Fraser Valley Townhomes: The benchmark price is $670,000, up 2.7% from April 2021 and 20.7% from May 2020.
Fraser Valley Apartments: The benchmark price is $488,500, a 2.0% increase from April 2021 and a 12.6% increase from May 2020.
These price increases amidst declining sales in Metro Vancouver and record-breaking sales in the Fraser Valley suggest that while demand has softened in one area, the overall market remains competitive and prices continue to rise.
Days on Market: What to Expect
In Metro Vancouver, homes are likely to stay on the market longer due to rising inventory and slowing sales. Sellers should prepare for potentially longer selling periods and consider enhancing their home’s appeal through staging, improvements, or strategic pricing.
In the Fraser Valley, homes are selling quickly despite the high inventory. The average number of days to sell a single-family detached home was 14, a townhome was 12 days, and apartments took 20 days on average.
Impact of Recent Bank of Canada Announcement
Last week, the Bank of Canada made a significant announcement that could have a profound impact on the real estate market. The Bank reduced its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. This decision comes amidst continued evidence that underlying inflation is easing, with CPI inflation further dropping to 2.7% in April.
The global economy grew by about 3% in the first quarter of 2024, while Canada’s economic growth resumed at 1.7%, slower than initially forecasted. Despite solid consumption growth and increased business investment, weaker inventory investment dampened overall activity. The labour market remains tight, but wage pressures are gradually moderating.
With these changes, the Bank’s Governing Council felt that monetary policy no longer needs to be as restrictive. This reduction in interest rates could lower borrowing costs for buyers, potentially boosting demand in the housing market. For sellers, this could mean a more favourable selling environment as financing becomes more accessible for prospective buyers.
Read the Bank of Canada Report
The recent interest rate reduction by the Bank of Canada could stimulate buyer interest and activity, making it a potentially opportune time to enter the market. For both buyers and sellers, staying informed about these changes and working with knowledgeable real estate professionals is crucial.
Future Outlook and Relevance for Buyers and Sellers
Looking ahead, the market is expected to continue showing signs of balance with a potential for slower price growth. Buyers who have been waiting on the sidelines may find more favourable conditions this summer. Sellers, on the other hand, should be prepared for a more competitive environment and may need to be flexible with pricing and offers.
The recent interest rate reduction by the Bank of Canada could stimulate buyer interest and activity, making it a potentially opportune time to enter the market. For both buyers and sellers, staying informed about these changes and working with knowledgeable real estate professionals is crucial.
Stay Informed
We’re here to help you navigate these market changes. If you’re considering buying or selling, or just want to understand what these trends mean for you, don’t hesitate to reach out so we can put together a Solution to ensure you reach your Real Estate goals.
Metro Vancouver and Fraser Valley Real Estate Update: May 2024
Home Sales Decline as Inventory Rises
Hello Solutions Real Estate Group Community,
Welcome to our latest blog update, where we bring you the freshest insights into Metro Vancouver’s and Fraser Valley’s real estate markets. May has been a month of significant changes that could influence your buying or selling decisions.
Supply: Rising Inventory in Both Regions
One of the most notable trends this month is the significant increase in the number of homes available for sale in both Metro Vancouver and the Fraser Valley.
In Metro Vancouver, according to the Greater Vancouver REALTORS® (GVR), there are currently 13,600 properties listed on the Multiple Listing Service® (MLS®). This represents a substantial 46.3% increase compared to May 2023. Additionally, 6,374 properties were newly listed in May 2024 alone, which is a 12.6% rise from the previous year and a 7% increase compared to the 10-year seasonal average.
In Fraser Valley, the situation is equally dynamic. The Fraser Valley Real Estate Board (FVREB) received 3,926 new listings in May, an increase of 78% compared to last year, although this marks a 22% decrease compared to April 2021. The month ended with total active inventory sitting at 5,868, a 3% decrease compared to April, and 9% less than May of last year.
This rise in inventory is good news for buyers, as it means more options and potentially more negotiating power. For sellers, it suggests a need to be more strategic with pricing and marketing to stand out in a more crowded market.
Demand: Sales Slowdown in Metro Vancouver vs. High Demand in Fraser Valley
While Metro Vancouver has seen a decrease in demand, the Fraser Valley is experiencing near-record-breaking demand.
In Metro Vancouver, residential sales totaled 2,733 in May 2024, which is a 19.9% drop from May 2023 and a 19.6% decrease from the 10-year seasonal average for May. Andrew Lis, GVR’s director of economics and data analytics, attributes this slowdown to various factors such as higher borrowing costs, economic concerns, and policy changes.
Conversely, Fraser Valley continues to experience extraordinary demand. The FVREB processed 2,951 sales in May, an increase of 267% compared to May 2020 and only a slight 2% decrease compared to April 2024. This near-record high is indicative of the intense buyer interest in the region, driven by increased inventory and ongoing demand.
Prices: Steady Increases Across Both Markets
Despite the slowdown in sales in Metro Vancouver, home prices have continued to see modest increases across different property types:
Metro Vancouver Detached Homes: The benchmark price is $2,062,600, reflecting a 5.9% increase from May 2023 and a 1.3% rise compared to April 2024.
Metro Vancouver Apartment Homes: The benchmark price is $776,200, a 2.2% increase from May 2023.
Metro Vancouver Attached Homes: The benchmark price is $1,145,500, showing a 5.2% increase from May 2023.
In the Fraser Valley, price increases have been even more pronounced:
Fraser Valley Detached Homes: The benchmark price is $1,323,300, up 2.3% from April 2021 and a significant 33.6% increase from May 2020.
Fraser Valley Townhomes: The benchmark price is $670,000, up 2.7% from April 2021 and 20.7% from May 2020.
Fraser Valley Apartments: The benchmark price is $488,500, a 2.0% increase from April 2021 and a 12.6% increase from May 2020.
These price increases amidst declining sales in Metro Vancouver and record-breaking sales in the Fraser Valley suggest that while demand has softened in one area, the overall market remains competitive and prices continue to rise.
Days on Market: What to Expect
In Metro Vancouver, homes are likely to stay on the market longer due to rising inventory and slowing sales. Sellers should prepare for potentially longer selling periods and consider enhancing their home’s appeal through staging, improvements, or strategic pricing.
In the Fraser Valley, homes are selling quickly despite the high inventory. The average number of days to sell a single-family detached home was 14, a townhome was 12 days, and apartments took 20 days on average.
Impact of Recent Bank of Canada Announcement
Last week, the Bank of Canada made a significant announcement that could have a profound impact on the real estate market. The Bank reduced its target for the overnight rate to 4¾%, with the Bank Rate at 5% and the deposit rate at 4¾%. This decision comes amidst continued evidence that underlying inflation is easing, with CPI inflation further dropping to 2.7% in April.
The global economy grew by about 3% in the first quarter of 2024, while Canada’s economic growth resumed at 1.7%, slower than initially forecasted. Despite solid consumption growth and increased business investment, weaker inventory investment dampened overall activity. The labour market remains tight, but wage pressures are gradually moderating.
With these changes, the Bank’s Governing Council felt that monetary policy no longer needs to be as restrictive. This reduction in interest rates could lower borrowing costs for buyers, potentially boosting demand in the housing market. For sellers, this could mean a more favorable selling environment as financing becomes more accessible for prospective buyers.
Future Outlook and Relevance for Buyers and Sellers
Looking ahead, the market is expected to continue showing signs of balance with a potential for slower price growth. Buyers who have been waiting on the sidelines may find more favorable conditions this summer. Sellers, on the other hand, should be prepared for a more competitive environment and may need to be flexible with pricing and offers.
The recent interest rate reduction by the Bank of Canada could stimulate buyer interest and activity, making it a potentially opportune time to enter the market. For both buyers and sellers, staying informed about these changes and working with knowledgeable real estate professionals is crucial.
Stay Informed
We’re here to help you navigate these market changes. If you’re considering buying or selling, or just want to understand what these trends mean for you, don’t hesitate to reach out.
For more information, visit our website at Solutions Real Estate Group or contact us directly.
Warm regards,
John Kemp
PREC/Founder
Solutions Real Estate Group
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.
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