Real Estate Update Jan 2020
What is the forecast for real estate in 2020? The real estate market in the Fraser Valley ended 2019 with average sales and a mostly sellers market due to very low inventory. This was a stark contrast to the first half of 2019 where sales were well below average. Prices in many areas have stabilized over the past three months after 12 months of decreases. Typically, the spring season is where we see the greatest number of sales however, in 2019, sales were down in the spring and up during the fall months.This contrary scenario has many people wondering about the upcoming spring market. Will this trend of increasing sales continue into the spring? Will we see prices increase over the next six months?
2020 starts the year with very low inventory levels throughout the Fraser Valley and Vancouver area. Sales have been increasing since July 2019. If demand continue to grow, low inventory levels may push prices up. In North Delta, 45 detached homes were sold in December 2019 out of 84 properties listed on the MLS. With a 54% turnover rate in December, that put North Delta in a sellers market for detached properties. Compare this to December 2018 when only 16 detached homes sold out of 142 properties listed on the MLS. The change in supply and demand has resulted in a price increase of about 3.3% over the past three months for detached homes in North Delta. Cloverdale, Mission and Langley have also shown an increase in prices for detached homes, ranging from 1% to 1.5%.
Vancouver area prices for detached homes have also stabilized over the past three months. Even the most expensive areas of Vancouver: West Vancouver, Richmond and Vancouver west side are experiencing stable prices. Attached properties in the Vancouver area are seeing prices increase in many areas.
The strongest demand for housing in the Fraser Valley and Vancouver area continues to be for townhouses and condos. The Canadian Mortgage and Housing Corporation recently reported that in 2019, Vancouver (includes Fraser Valley) had a 31% increase in new construction for townhouses and condos compared to 2018. This increase in new construction may help to maintain stable prices throughout the region.
Many economists expect the overnight bank rate to remain at 1.75% for now. The economy continues to grow at a sluggish rate but a recession is not expected to hit Canada in 2020. High immigration into Vancouver is expected to bolster demand for housing in the area.
The Conference Board of Canada forecast in December that Canada’s economy will grow by 1.8 per cent in 2020, a modest uptick from the 1.7 per cent growth seen last year.
Regionally, British Columbia and Quebec are expected to see the strongest economic growth, according to the Business Development Bank of Canada.
Buyer Opportunities (Detached)
Prices in South Surrey remain particularly low. Compared to central Surrey, the price difference between the two areas is only 30% – the smallest gap in over 15 years. In July 2017, the price difference between the two areas was 54%. In the past three years, South Surrey is the only area in the Fraser Valley that is showing a loss in value (down 7.5%) while all other areas have posted price gains of 8% to 18%.
Buyer Opportunities (Attached)
South Surrey had the smallest turnover of attached properties in December compared to the rest of the Fraser Valley. The inventory is still decent and price increases over the past three years are the lowest in the Fraser Valley.
If you are thinking of selling in the spring, now is the time to speak with me. Preparing your home for sale takes time and you may require the help of several different trades and services. Over many years, I have put together a list of highly recommended companies to serve your needs in this regard. Call or email, I’d be happy to send you my recommendations.