Fraser Valley residential real estate

Key Take-Aways from the August Statistics

The Fraser Valley Real Estate Board’s monthly sales data is delightfully boring this month, following nearly every historical seasonal trend we would expect to see for the dead of Summer – fewer and slower sales, relatively flat prices, and a small uptick in active listings. It is welcomed stability and a good sign for the Fall market.

Highlights from the August statistics:

• Rising Benchmark Prices took a breather in August, holding relatively flat for all home types. Single-family prices decreased by 0.6%, townhouse decreased by 0.5%, and condo decreased by 0.4%.
• Sales dipped by a modest 4-15% month-over-month, depending on home type.
• New listings declined 8-11% but active listings only rose by 1-3% depending on home type,which is a muted increase for this time of year.
• Days on market increased by 11-13% but remained at only 54-77% of the 10-year average, indicating historically persistent demand relative to supply.
• Not only is the direction of the shift in key metrics consistent with this time of year, the magnitude is also nearly perfectly consistent, suggesting a considerable portion of the shift can be attributed to typical seasonality.

How the Fraser Valley land market is reacting

Market sentiment was steady and generally optimistic through August, with many in the development industry attributing at least some of the perceived lull to summer vacations, the balance being blamed on an ever-challenging lending environment and a looming interest rate increase announcement on September 6th. Incidentally, those same conversations that began with concern over a protracted high-interest rate environment almost always ended with an optimistic view of the next development land acquisition targets. For those still in town, it was largely business as usual, hunting for the next site, albeit with caution and discipline.

Throughout the month of August, predictions for the September 6th interest rate announcement were more evenly split than I have ever seen, with most admitting it feels like a bit of a coin toss. That unpredictability continued to necessitate longer due diligence periods and extended completions in land deals, with buyers aiming to close in a friendlier lending environment (late 2024 or beyond). Then the GDP data announcement came out on September 1st, reporting the Canadian economy stalled in Q2, and, like a light switch, consensus was formed around an interest rate hold on September 6th.

While my intent with this commentary is to report on the development land market over the last calendar month, I’m going to cheat a bit as it’s hard not to ignore the interest rate hold just announced and the immediate, positive impact it has had on sentiment in only a few hours.