August 2022 Real Estate Stats

Hey Everybody

Hope everyone is having an amazing end of their Summer!

It’s back-to-school time for many of our clients and we know what a BUSY time of year this can be…so I’ll get right to THE STATS !!!

So the majority of homes fell in value last month which should be no surprise if you’ve been reading my updates! We saw an average drop of 3% to 11% in Detached Home Prices across the Fraser Valley but the story with Condos/Townhomes was more interesting. We had these prices fall as much as 20% in Mission while actually increasing a staggering 8% in Langley! This is more than likely an outlier that will adjust with the rest of the market, especially when you scroll down to my forecasting overall!

So what does this actually mean in comparison to the last couple of years? Well effectively prices in the Fraser Valley are now the same as they were in July 2021. So anyone who bought then had their prices surge about 25% – 40% …and now they are right back where they were at the start. It’s the sharpest increase and decline in Canadian housing history by a mile!

Where are things headed?

Well right before I hit the send button on this, during editing, what I forecasted last month came true: there was just another announcement from the Bank of Canada for another 0.75% increase in interest rates! I think you all remember the chilling effects the last three interest rate hikes had on the market so you can expect it to have the same effect once again – The big question is “To what degree”?

And that’s the multi-million dollar question! If we follow our neighbors to the south (Who we’re forever intertwined with!) and look at the Federal Reserve Chair, Jerome Powell, he delivered a pretty powerful message recently saying that they will be aggressive on interest rate hikes to curb their record inflation. He’s said this consistently in recent months and has delivered nearly every time. Our own Bank of Canada Governor, Tiff Macklem said on Aug.16 that our 40-year high of inflation was their major concern. Both only have a few mechanisms to control inflation and interest rates are the main one and it’s both their mandates to reduce inflation and lower unemployment. It’s not hard to imagine several rate hikes well into 2023 based on what many expert economists (on both sides of the aisle) say! What could this do to prices?

Well if there isn’t some massive geo-political shift in the world I would expect our prices to fall another 10%-20% over the next 12-18 months. There are some economists forecasting far bigger drops, and there are some who, in my opinion, have very rose-colored glasses, but there seems to be the most credibility around this range based on what I already know.

(I won’t even bother getting into things like the future “Cooling Off Period” the NDP’s are bringing in which I covered extensively but that’s another policy which won’t help things.)

Overall if you are planning on buying and selling, you’re going to want to have a conversation with your Realtor ASAP! Now is not the time to wait if you have any Real Estate questions or feel like it’s time for a move as depending what your circumstances are specifically, now could be a time to watch and wait as the market cools more OR could be great time to make a move if you already own – lots of factors so you’ll want to chat with your agent!

Hope you all found this update helpful to make sense of this crazy market!

As always, Please email me if you have any questions or just want to chat about real estate! Happy to chat anytime with no obligation 🙂

Cheers!

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