Those who were hoping the Bank of Canada's rate cut on June 5 would spark activity in the real estate market will have to continue waiting, as home sales in the Fraser Valley went the other direction in June, according to statistics published by the Fraser Valley Real Estate Board (FVREB) on Wednesday.
In June, the Fraser Valley recorded a grand total of 1,317 home sales, which represents a decrease of 13% from May 2024 and a decrease of over 30% from both this time last year and the 10-year average for June.
New listings totalled to 3,418, which represents a decrease from May, but inventory continued to build up for the sixth straight month, with the amount of active listings in the market now up to 8,350, which represents an increase of 41% from June 2023 and the highest total recorded in five years, according to the FVREB.
"The June rate cut hasn't been enough to get buyers off the sidelines," said FVREB CEO Baldev Gill.
Buyers or Sellers
Using 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 that can give us a sense of whether the market is currently leaning towards buyers or sellers.
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 considered a sellers' market, and anything in between is considered a sign of market balance.
With 1,317 home sales and 3,418 new listings in June, the sales-to-new-listings ratio is now at 38.5% after being at 40.3% after May, indicating that buyers may currently have an advantage in 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 a balanced market.
With 1,317 home sales and 8,350 total active listings after June, the sales-to-active-listings ratio is now at 15.7% after being at 19.2% following May, indicating that the market may still be fairly balanced, but with movement toward favouring buyers.
Analysis and Outlook
Following June the composite residential benchmark price is now $1,528,900 for single-family homes, $851,100 for townhouses, and $551,100 for condominiums.
All three represent minor decreases of between 0.1% and 0.7% from May 2024, but small increases of between 0.4% and 0.8% when compared to June 2023.
"With seasonally slow sales in June and a steady increase in inventory, we'd expect to see affordability improve," said FVREB Chair Jeff Chadha. "However, prices in the Fraser Valley remained relatively flat. That said, despite slow sales, properties that are well-priced are finding buyers, and are subsequently selling within three to four weeks."
According to the FVREB single-family homes are staying on the market for an average of 22 days, while townhouses are staying for an average of 20 days and condos are staying for an average of 30 days.
The next opportunity for a spark in the market will be Wednesday, July 24, when the Bank of Canada will make its next interest rate announcement.
