It’s hard to believe that Fraser Valley is battling through a coronavirus pandemic with the rest of Canada when this British Columbia regional district is witnessing such tremendous growth. A peek at the numbers within the Fraser Valley real estate market quickly reveal that the COVID-19 public health crisis has failed to thwart any growth plans for this local market, which is, in fact, thriving!
The year has just gotten started, but Fraser Valley might be setting itself up for an impressive 2021, thanks to another record-breaking month for home sales in the jurisdiction downstream from the Fraser Canyon.
How well did the Fraser Valley real estate market perform last month? Let’s just say that Fraser Valley extended its momentum from 2020 into 2021, kicking off the year on a high note.
Fraser Valley Starts 2021 With Record Activity in the Local Real Estate Market
According to the Fraser Valley Real Estate Board (FVREB), residential sales surged 76 per cent year-over-year in January, with real estate agents processing 1,718 transactions. Overall, housing sales popped to a record-high for the month, climbing 72 per cent above the ten-year average. The previous record occurred in January 2016 when a little more than 1,300 sales were executed.
Real estate prices also recorded modest gains in January across all property types:
- Single Family Detached: +2.5 per cent to $1,106,500.
- Townhomes: +0.8 per cent to $580,800.
- Apartments: +0.3 per cent to $439,800.
Industry observers will be honing in on housing stocks as total active inventory for January was down 18 per cent from the same time a year ago. Active supply was also 30 per cent below the ten-year average. Plus, the average number of days to sell a single-family detached home was only 35 days, well under the 60 days reported in January 2020, suggesting that homebuyers are scooping up homes as quickly as they can find them.
Right now, according to Chris Shields, president of the FVREB, this is a seller’s market.
“Buyers are very motivated right now. Lending rates are the lowest they’ve ever been, your housing dollar goes further in the Fraser Valley and we’ve seen a societal shift in the last year in how people value their homes. People are asking us to find them more space,” he said in a news release.
Can the Fraser Valley real estate market sustain its growth? Or will the momentum begin to subside?
Factors Driving Fraser Valley Real Estate in 2021
Like the rest of the Canadian real estate market, the Fraser Valley housing sector will continue to see growth from historically low interest rates. The Bank of Canda (BoC) has kept its benchmark rate near zero for nearly a year, and the institution has signaled that it will not tighten policy for at least another year as part of efforts to support the post-coronavirus economic recovery. Put simply, borrowing costs will be lower in 2021.
Although there is light at the end of the tunnel for the COVID-19 public health crisis, it is more than likely that consumers’ altered behaviours will remain the same, at least in the near future. Whether it is leaving major urban centres or working from home, homebuyers have changed their demands over the last 12 months, with many households upgrading from their urban condominiums or new entrants searching for larger properties.
Strengthening demand and low supply will be other contributing factors to the region’s housing market.
“I am working with a young couple who want and are able to move up – from a condo to a townhome – due to interest rates and the equity they’ve gained over the last couple of years. The challenge is supply. It improved slightly in January, but we’ve got a long way to go to replenish our housing stock. It remains a seller’s market,” Shields added.
Could spring see an improvement in inventories?
Baldev Gill, Chief Executive Officer of the Board, is optimistic, noting in a statement: “And note, we’re already seeing an improvement in supply levels compared to December, a trend we anticipate that will continue as spring approaches bringing what is typically one of the busiest markets of the year.”
For now, based on the RE/MAX Outlook for Fraser Valley real estate in 2021, housing prices are forecast to advance two per cent to a little more than $715,000, buoyed by young couples and families.
The Ripple Effect?
Fraser Valley is also benefiting from a so-called ripple effect. Real estate agents say that the booming Vancouver market is seeping into nearby areas, including Fraser Valley. In other words, sales in one area are affecting another as homebuyers are concerned about skyrocketing prices. This phenomenon, writes the Vancouver Sun, also occurred in 2016 when the city’s remarkable ascent sent other markets soaring.
If Metro Vancouver is winning, then so is everybody else. Since Fraser Valley is about 90 minutes from Vancouver, its housing market will continue to piggyback off the West Coast city’s success. And this is a win-win for homebuyers and homeowners.