For the first time in over a year April’s home sales in the Fraser Valley recorded an increase and for the 2nd month in a row the benchmark price of a typical home In the Fraser valley increased by 0.1 per cent.
Could this be a sign the spring market is upon us? Will May show more of this recent trend? Its hard to chart.
As of this week, conditions remain firmly entrenched in favor of the buyer. Month over month sellers enter the market while buyers wait safely in the nearest port.
Inflation, interest rates, speculators waiting for the bottom and the ongoing Iranian conflict continue to muddy the waters. Let’s take a closer look …
Inflation: Despite decelerating core inflation (sans gasoline), the ongoing Iranian conflict and its shock to global oil supply is placing upward pressure on inflation. The depth of the shock continues to be assessed. Some expect an uptick in inflation to 3 percent in the coming months as oil prices filer through.
Interest rates: At the last meeting, the Bank of Canada held rates again, the fourth time in a row. Fixed rates are still the safe play. The BOC expects rates to ease back down by 2027 but they remain cautious, watching and waiting as their delayed response to rising inflation during covid remains fresh in the public mind.
Speculation: As mentioned in our recent blog update many buyers are hoping pricing will soften further. This is harder than one may think especially with market volatility making timing trickier than ever.
Global instability: Oil can’t make up its mind. Iran offered a peace deal, prices dropped, Trump was not satisfied, prices went up. Until the Straight of Hormuz shipping route reopens oil prices and everything connected to them in every corner of the globe, will remain unpredictable.
As if the above were not enough to keep buyers and sellers from wading in; a 0.1 decline in the Canadian GDP for the first quarter of the year just hit the news feed.
Specific groups are having a harder time than others navigating these conditions;
Boomers who plan to downsize but can’t sell at the number they need or want.
Presale construction buyers facing huge appraisal shortfalls at closing.
Homeowners who counted on refinancing to clear high interest debt but don’t have the equity anymore.
Subject to sale buyers who negotiated a fair price upon acceptance, then watched that value soften week over week while they wait to sell their current home.
Moving further into the year, buyers and sellers are well advised to consult with local realtors, mortgage brokers and financial advisers to help chart a safe and steady course forward.
We can help. Its what we do.
Jenn and Colin
Written by Jenn. Photo by Matt Hardy on Unsplash
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