It's not unusual for real estate market activity to cool down this time of year, but consecutive interest rate increases are likely also playing a significant role in dampening market activity, according new statistics published by the Fraser Valley Real Estate Board (FVREB) on Wednesday.
In July, the Fraser Valley recorded a grand total of 1,368 home sales, a 29.3% decrease from the 1,935 recorded in June, but 37.8% above July 2022.
In terms of new listings, July saw 2,855, which was 16.6% less than the 3,424 new listings in June. The number of new listings is 19.7% higher than July 2022, but virtually on par with the 10-year average for the month, according to the FVREB.
With those new listings, the number of total active listings was 6,199, a 4.3% increase from last month.
"Summer is typically a slower period for the real estate sector and the higher interest rates are contributing to the market slowdown," said FVREB Chair Narinder Bains. "We're seeing less traffic and fewer multiple offers as buyers and sellers put a pause on decisions and we expect this trend to continue until the fall cycle."
The Market Lean
So, are we in a buyers' market now or a sellers' market?
With the aforementioned statistics, we can identify the sales-to-new-listing ratio as well as the sales-to-active-listings ratio, which are two quantitative indicators of whether the market is currently 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 a sellers' market, and anything in between is viewed as a sign of market balance.
With 1,368 home sales and 2,855 new listings recorded in July, the sales-to-new-listings ratio is now at 47.9%. In June, the ratio was at 56.5%, indicating that the market has moved towards more of a balance.
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 1,368 home sales and 6,199 total active listings in July, the sales-to-active-listings ratio is now at 22.1%, after being at 32.6% in June, again indicating movement towards market balance, with perhaps a small advantage for sellers to be found.
By property type, the sales-to-active-listings ratio is now 17% for single-detached homes, 45% for townhouses, and 36% for condominiums.
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Pricing Remains Undeterred
Home pricing is one thing that remains unaffected, however.
According to FVREB, the benchmark price is now $1,543,300 for single-detached homes, $850,300 for townhouses, and $555,500 for condominiums. All three represent minor increases between 0.6% and 1.1% over June.
In terms of how many days properties stayed on the market, FVREB reports that the average number of days before selling was 22 for single-detached homes, 16 for townhouses, and 18 for condominiums.
"After five months of successive increases, real estate sales in the Fraser Valley dropped in response to a combination of continued rising interest rates and the summer sales cycle," the FVREB says.
Adds FBREV CEO Baldev Gill: "With rates at their highest levels in over 20 years and inflation still elevated, buyers and sellers are taking time to reevaluate their objectives."
The Bank of Canada's next policy interest rate announcement is scheduled for September 6.
