Are you wondering ... Where did our real estate market go?
Our local market has been an all out sprint since January but In the last 30 days our phones have literally stopped ringing. Our clients are wondering what this means for them now or in the near future should they want or need to sell or purchase a home.
Things have been slowing since August when the Foreign Buyers Tax was introduced with the initial down curve in sales pricing subtle and in keeping with seasonal trends.
Slowing of buyer activity is common during the final quarter of the year (most families had made their move prior to the start of the school year) but this years close is somewhat extraordinary as it follows recent restrictions on mortgage lending and the stratospheric rising of home prices we have seen for the 18 months or so.
Now that Sept and Oct have passed us by it has become clear buyer activity (across property types) has ceased and for the time being at least - the market seems to have disappeared altogether.
Although interest rates are not projected to rise for 3-5 years and our BC Economy still comes out strong on the national scale - growth in Real Estate Markets and Stock Markets have reached a peak. The Foreign Buyers Tax, the tightening of mortgage lending restrictions and the consumer uncertainty we are seeing in the stock markets lead us to believe our Real Estate Markets may be in a holding pattern for a number of months.
And therein lies our challenge. A holding pattern of low inventory and no sales means the new normal has yet to be established. Our clients who wish to make a sale right now are lacking the hard data from which to draw informed decisions around initial pricing or price reductions. Further to that, we have no data to assist in projecting price estimates for our clients who may wish to make a move in the new year.
The most recent stats release from the Fraser Valley Board is showing the initial stages of price contraction.
From Sept to Oct Benchmark pricing of detached homes in Surrey/Cloverdale only went up by 1.0% and White Rock/South Surrey reduced by -0.1%.
During the same time benchmark pricing of detached homes in all of Surrey combined - dropped -0.8% and the Fraser Valley combined saw a reduction of -0.7%.
Townhome and condo numbers look much the same.
So for now we wait. Rumblings in the world of stock market analysis point to a recession or significant correction in the economy come this same time next year. One analyst was quoted saying: "we are somewhere in between the 7th and 9th inning".
So "Bull" or "Bear" we may be in for a long winter!