In the past few months we have blogged a plenty about the astronomical spike in condo and townhome sales this year. This trend – greatly attributed to the lack of affordable housing - is still going strong with condo and townhome home sales making up 53% of all market activity in November.
But what about detached home sales now and moving into the first quarter of 2018? Let’s take a look.
November stats show a clear downward trend in single family detached activity in Surrey, South Surrey, White Rock and Cloverdale. Although many of us in the profession felt the market adjust in July, the stats registered this shift most notably, in August.
Moving into the holiday season we have yet to see pricing make any notable correction however sales activity on single family homes has taken a sharp downturn. We suspect this sharp drop in buyer activity will continue until we start to see sale prices soften. With the average sale price of a home in the Fraser Valley now just over $1,000,000 very few can afford to buy in this category.
Complicating matters will be the impact of rising mortgage rates and new mortgage regulations. Mortgage rates increased in 2017 and are forecast to continue to rise thru 2018 and buyers with more than 20% down are now expected to qualify for a mortgage at a rate at least as high as the posted rate … now sitting at 4.99%.
Similarly, the economy will play a role in forecasting for 2018. Despite strong economic growth in 2017, inflation remains subdued and household debt is elevated. Both factors will play a role in dampening housing demand.
Those who currently own a single family home and want to sell in the near future may have to adjust their expectations regarding their potential sale price. Gone are the days of asking more than our neighbor and setting sale price records. Today’s sellers of a single family home will pioneer this new market territory and upon sale - set new pricing benchmarks in this category.
Having seen this downward shift a few times since we were licensed in 2005 we have learned this adjustment of expectations can take 3-6 months to complete..
If you are thinking of selling in the new year we would LOVE to have the opportunity to talk to you about how we can help.
Have a wonderful Holiday Season and a Happy New Year!