According the the British Columbia Real Estate Association (BCREA) the housing market in this province appears to be stabilizing.
For the last 18 months or so the market has been very volatile. As many of you are aware, this volatility was triggered by the B20 mortgage stress test and other policy changes that were put in place to curb supply, sustainability and affordability issues.
Although these policy changes are still gripping home sales in the province (many buyers can no longer obtain financing) in the last few months we have seen a slight recovery in home sales. This has slowed the acccumulation of resale listings on the market leaving market conditions in a more balanced way.
With offers and firm sales few and far between “balanced” is likely not the first word to come to mind for our sellers in Surrey and the surrounding areas but analysts anticipate downward pressure on home prices when the sales to active ratio dips below 12% for a sustained period of time. Conversely, home prices experience upward pressure when this ratio surpasses 20%.
The sales to active ratio for all property types in Surrey BC currently sits at 21.1%. Up from 17.6% in August.
See the ratio trend HERE
Despite ongoing financing challenges some say this moderating trend is a sign markets are normalizing from the policy measures put in place a year and a half ago. In fact, the BCREA is forecasting housing markets to fully normalize around long term averages in 2020.
That being said there are some red flags on the horizon with respect to the BC housing market;
Despite strong employment growth over the summer, economic growth in BC is expected to slow for a second consecutive year. Additionally, consumer spending remains cautious and the uncertain economic outlook in the US is making market forecasting challenging to say the least.
In summary, four key points:
- For now, despite low interest rates, financing continues to be an issue.
- Housing prices have little upward pressure and are still contracting compared to a year ago.
- But over the last four months pricing has been moderating, as new listings decrease and the aging housing stock shrinks.
- Moderating pressure on pricing is creating a more balanced environment for buyers and sellers.
If you have been considering a sale this fall / winter, your asking price will be of paramount importance. Ensure you have considered all market forces at play and book your free home evaluation now.
Photo by VanveenJF on Unsplash