Key take-aways from the February statistics
Monthly home sales data is out from the Fraser Valley Real Estate Board and February saw a shockingly abrupt turnaround in all key metrics as consumers re-engage with the market, chasing a limited quantity of listings. One month is not a trend but given we’re entering the Spring market, where the data tends to improve regardless, it’s more likely this trajectory continues.
Highlights from the February statistics include:
- An increase in Benchmark Prices for all home types. Condos lead the pack with a 1.3% increase over last month. Detached homes and townhomes saw 0.5% and 0.4% increases respectively.
- A significant drop in average days on market seeing homes sell 15-25% faster than in January.
- A jump in sale price as a percent of original list price of 1.9-2.5% depending on home type which is consistent with anecdotal reports of multiple offers again.
- Minimal 6% month-over-month growth in total active listings which resulted in total listings ending the month at only 72% of the 10 year average. Incidentally, townhome listings only grew by 1.4% compared to January.
How the Fraser Valley land market is reacting
Late January’s surge in deal activity continued through February, growing steadily as market forecasts anticipate a much brighter future. In addition to the Bank of Canada indicating a pause in interest rate increases for the time being, we also saw inflation data that outperformed economist expectations, heard good news stories of healthy absorption at new project launches and saw multiple offers again on accurately priced resale homes.
Development land values are always slow to move during a downward correction, as it simply takes time for vendors to accept lower market values and for new transaction data to officially reset land values. However, we’re beginning to reach that transition point in the price discovery phase, opening the window for deals to happen again, at lower prices.
With that said, that window may not be open as long as some are hoping as the prospect of January being the bottom of the market (further evidenced by February’s MLS data from the FVREB) has developers and investors back in buy mode. Due diligence time in transactions needs to allow for disciplined purchasing behaviour and completions almost “need” to be longer to get deals done, but there is no shortage of appetite to acquire land for the future.
A snapshot of key metricsFebruary 2023
Detached homesThe single family detached home market is consistently the first segment to move, either up or down, when the market is shifting. As a result, we look to this segment as an indicator for market directionality and velocity.
Home sales in the Fraser ValleyThe following charts summarize the month’s total home sales throughout the Fraser Valley.
Days on MarketDays on Market is the average length of time listings of that home type stayed on market before selling firm. This metric is an indicator of competition among buyers and the month-over-month change can tell us whether the market is accelerating or decelerating.
New and active listings in the Fraser ValleyNew listings is the cumulative quantity of listings posted for the month. Active listings is the quantity of active listings on the last day of the month.
Listings over time
Listing metrics tend to be seasonally cyclical making month-over-month reports misleading as indicators of market shifts. The below chart shows each month's active and new listings over the past decade. The current month is highlighted on each line to illustrate how today's data compares to the past 10 years of data for the same month.
HPI benchmark pricesHPI Index establishes "Benchmark Prices" for a typical home in each major housing category. Benchmark Prices, as a relative metric, tend to be a more accurate indicator of market direction and velocity as they are not subject to the composition of home types being sold, like average home prices.
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Data sourced from Fraser Valley Real Estate Board