Market activity in the Fraser Valley is steadily picking up, both in terms of sales and new listings, according to May statistics published by the Fraser Valley Real Estate Board (FVREB) on Friday.
In May, the Fraser Valley registered 1,711 home sales, a 10.1% increase over the 1,554 sold in April and a 25.8% improvement compared to May 2022.
Home sales started 2023 at just 626 in January, but have subsequently been gaining steam each month to 898 in February, and then 1,550 in March.
Aside from sales, new listings saw an even stronger increase in the Fraser Valley, surging by over 40% compared to April with 3,533 new listings. According to FVREV, that number is just slightly below the 3,631 added in May 2022, but slightly higher (2.7%) than the 10-year average for the region.
This new influx of supply brings the number of active listings in the Fraser Valley to 5,558, which represents a 20% increase over April and the highest month-over-month increase in over a year.
"It's encouraging to see more typically cyclical activity this spring," said FVREB CEO Baldev Gill. "Inventory has been trending upwards since December 2022, providing more choice, which in turn will hopefully spur on even more listings. That said, with inflation tracking at elevated levels, the potential for further rate hikes is very real."
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The Market Lean
With activity increasing, is there an advantage to be found for buyers, or is the market favouring sellers?
The aforementioned statistics allow us to identify the sales-to-new-listings ratio and the sales-to-active-listings ratio, two quantitative indicators of whether the market is leaning in any particular direction.
For the sales-to-new-listings ratio, a ratio of 40% or lower is considered a buyers' market, a ratio of 55% or higher is viewed as favouring sellers, and anything in between is viewed as a sign of market balance.
With 1,711 sales and 3,533 new listings recorded in May, the sales-to-new-listings ratio is now at 48.4%, after being at 62.7% after April. This suggests that while activity has picked up a bit, the amount of new supply has brought a healthy balance to the market.
For the sales-to-active-listings ratio, 12% or lower is viewed as a buyers' market, 20% or over is viewed as a sellers' market, and anything in between is viewed as market balance.
With 1,711 sales and 5,558 total active listings after May, the sales-to-active-listings ratio is now 30.8%, after being at 33.5% after April, another indication that the scales are moving towards a balance.
Prices Edge Upwards
Home prices have also continued on their upwards trajectory, with the composite residential benchmark price now over $1M, at $1.01M, a level last seen in September 2022.
By property type, the benchmark price is now $1,491,700 for single-detached homes, $826,200 for townhouses, and $542,300 for condominiums.
All three represent a 1-3% increase from April 2023, but a 6-13% decrease when compared to this time last year.
"Typically we would see an influx of inventory earlier in the spring sales cycle," said Narinder Bains, FVREB Chair. "The series of interest rate hikes during the latter half of 2022 had many sellers and buyers in a holding pattern for most of the year. What we're seeing now is a recovery and adjustment to the new financing landscape."
