Although it is still too early to see the full impact, March sales and new listing data show the preliminary impact of COVID‐19 on the Fraser Valley housing market.
The most up to date data from the Fraser Valley Real Estate Board (FVREB) indicates COVID‐19 has put the market on pause, as realtors and the public adhere to health authority rules and government guidelines on the pandemic.
During the first seven business days of the month, we were on track for an early and brisk spring market. Property sales were tracking 60 per cent higher compared to the same period in March 2019, however the remainder of the month finished significantly lower when compared to the same time last year.
Chris Shields, President of the Board, observes, “Sales were steadily increasing as is typical moving into spring, and then understandably and necessarily, they started to decline. We serve the public and we understand it is very challenging to buy or list a home while maintaining physical distancing … we are grateful that the BC government has designated real estate an essential service, and accordingly, our industry has implemented numerous measures to mitigate and manage risk. We have suspended open houses, restricted showings, pivoted to using technology as much as possible, and are urging Realtors in the middle of completing transactions with their clients to do so electronically.”
Though the “essential service” label does not remove our obligation to follow public health orders, it permits transactions for sellers and buyers who don’t feel they have a choice whether to buy or sell. Thus, the clients we are still working with include; Buyers who have sold their home already and need to buy another home to move to and those coping with divorce, separation, death, or a marked change in income that requires a sale. We have checklists and systems in place for remotely working with buyers and sellers that can significantly reduce risk and exposure for all those involved in a transaction.
We will not begin to see the impact of COVID-19 in economic data until later in the spring due to lags in processing data, but we know the BC economy was growing slowly even before the outbreak, with estimated real GDP growth under 2 per cent for the last several months.
The COVID-19 outbreak is occurring at a time in which BC housing markets are recovering from a two-year slowdown in activity. Early March home sales were trending at a healthy pace, close to their long-term average, and growth in home prices had been strong due to a significant lack of inventory.
The Canadian economy has endured three recessions since 1980. During those times, the BC economy has experienced an annual contraction of GDP or growth falling to near zero. In each of those periods, BC homes sales have experienced sharp declines that have lasted between 12 and 14 months.
At this time we still remain hopeful Real Estate Markets and the Canadian economy will see a strong rebound later this year but as with everything else in our world … we will know much more with time.
So stay tuned and please reach out if you want to chat about some strategies for selling or buying in this novel environment.
Jenn and Colin