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Home Buying, Market Intelligence, Real Estate News |
November 1, 2023
Mellow November
Welcome to Fall 2023, a season of reflection and market analysis in the Fraser Valley region. Let’s delve into the data from the third quarter alongside a concise summary of the market’s performance.
Undoubtedly, amidst the prevailing uncertainty, the market has witnessed a decline in sales activity over the third quarter of 2023 compared to the previous quarter, marking a 28 percent decrease. However, this is a positive contrast compared to the same period in 2022. Interestingly, sales during the summer and year-to-date have surged by 70 percent overall year-over-year. As we approach the year’s end, it’s essential to acknowledge the significant fluctuations and trends that have characterized 2023, heavily influenced by government interventions.
From eagerly anticipating each interest rate announcement to scrutinizing short-term rental accommodations and local housing targets, the market has weathered turbulent conditions driven by governmental decisions. The current high cost of borrowing for consumers highlights an intriguing trend: developments with longer completion dates are experiencing heightened sales activity. Home buyers are banking on future price increases and potential drops in interest rates before finalizing real estate transactions. Conversely, developments with inventory completing within a year struggle compared to those completing in 2025 or later.
With the higher cost of borrowing for consumers today, it is worth noting that developments with the longest completion dates are achieving the highest sales activity.
Amidst rising rates and efforts to combat inflation, there’s a parallel increase in wages, transportation costs, and import expenses. Additionally, cities and municipalities are upping development and community amenity charges, further pressuring pricing and discouraging new supply. This landscape often seems complex and challenging to navigate.
These multifaceted factors prompt purchasers and developers to carefully assess the market, likely delaying new home inventory until the numbers align favorably for them to proceed.
Please feel free to reach out with any questions you may have or to discuss potential sites you may be considering preparing for the market. The earlier marketing is introduced into the project development process, the more we can help guide and ensure the correct overall unit mix to achieve maximum sales and revenue results for each pocket of the Fraser Valley.
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