May 2023 – Fraser Valley Real Estate Market Snapshot

May 2023, Changes Are Brewing

While last month clearly had a strong sense of equilibrium, the month of May appears to bring changes to the real estate industry and market from every angle. Last month, the Bank of Canada did not move interest rates for two periods; however, they spoke of potential increases that materialized in the first week of June. Additionally, our provincial government announced targeted cities across the province to meet certain housing quotas.

Despite all these federal and provincial developments, the market still seems to be shifting towards more of a seller’s market, as discussed last month. In May, the number of sales in all product types increased both month to month and when compared to May 2022. In fact, it seems that May 2022 may have marked the bottom from which we need to recover, with absorptions across the Fraser Valley rising from 14% to as much as 37% compared to May 2022.

Another interesting observation is that the supply for multi-family products (townhomes and condominiums) has increased compared to the previous month but remains much lower than the same period last year. However, the supply of single-family homes is down by 16% compared to May 2022. This could potentially lead to further price escalation in all product types.

The most significant statistic of May 2023 is that prices of all product types are less than 5% below their levels in May 2022, just one year ago. This is an improvement from the drops as large as 30% reported in late 2022 and earlier this year. It indicates that prices are almost back to the pre-decline levels witnessed in spring 2022.

Now, with the new interest rates and the potential for two more increases later this year, as announced by the Bank of Canada, along with Premier David Eby’s announcement of the top communities to meet higher housing quotas within a six-month period. We will observe how these changes impact the market during the summer.

In the coming month, we anticipate some turmoil and uncertainty as the market adjusts to the new rates and cities rush to establish efficient approval processes, which have been clearly lacking and contributed to the housing predicament we find ourselves in today.