After three consecutive years the Fraser Valley real estate market has returned to more typical levels of sales and inventory.
Inventory is currently on the rise but pricing is still adjusting slowly due to the meager supply of inventory early 2018 and the sharp decline in demand caused by the mortgage stress test later in the year. Buyers are now afforded (no pun intended) the opportunity to look around and take their time to consider an offer. Whilst, sellers are having to price their home effectively to ensure they stand out in the crowd.
With the release of the 2019 property assessments (watch this VIDEO to decipher yours) affordability isn’t looking any better in 2019. In White Rock and Surrey detached homes have become impossible to buy for working people. The reality is most looking to buy in South Surrey or White Rock have few affordable options available.
The affordability crisis is nothing new and although living in BC has always come at a premium … wages, rental stock and home pricing have never been so out of whack. High prices, the mortgage stress test, higher interest rates and flatlined wages have created the perfect storm of unaffordability. So whilst homes are still selling, the pool of qualified buyers continues to shrink.
Here is a list of the 4 most important forces affecting the upcoming 2019 market:
The BC Economy. Despite its challenges, for now it continues to help buoy the housing market. Five years of growth in the province has led to a high level of employment. Unemployment sits at a cyclical low.
Demographics. Millennials continue to demand rentals and condo ownership in the urban centers of BC. With the aging population retirement friendly properties will continue to be in demand for several years to come.
Supply. Slowed sales in 2018 paired with an ever-increasing supply of new homes on the market has caused most markets to shift into what we call “balanced conditions” ie: no advantage for buyers or sellers. Consequently, price growth has slowed and is expected to more closely mirror consumer inflation.
Mortgage Rates. Rising mortgage rates are expected to compound the effects of the mortgage stress test, thus demand. Although the 5-year qualifying rate remains steady the Bank of Canada has embarked on its first tightening cycle since 2004. Rates are expected to rise as the bank continues to tighten. The effects of the mortgage stress test are still being felt as residential mortgages are at their slowest pace in 17 years.
If you are wondering how these factors may affect your real estate goals we are here to help. Connect with us anytime by clicking HERE