I hope you had a fantastic holiday season filled with lots of joy, fun, and laughter. We spent the time with our family and really enjoyed some peace and quiet!

Now, onto the not-so-fun stuff. The stats for December are in and they’re pretty much more of the same.

Sales Volume

Sales volume was down by an average of 20-30% compared to November, depending on the area. For example, there was a 67% increase in condo sales in Mission, but let’s be real – there were only 3 sales in November, so that stat is a bit misleading.

But how does this compare to historical trends? That’s the more important question, as sales volume is naturally cyclical. When we look at the last 18 years of data, we can see that this past December had the 3rd lowest sales for any December, with a total of just 651 sales in the Fraser Valley. We did forecast and predict a slower December, so this isn’t a surprise to us or our clients.

As for what will happen with sales now, it’s tough to say. But I’m expecting the volume of sales to increase from these historical lows in the coming months. Unfortunately, I don’t think prices will do much more than hold steady at best, but we’ll get into that later.

Listings

One strange thing about this market is that while prices have continued to fall and the volume of transactions has decreased, we’ve actually had a relatively low number of listings on the market! To give you an idea of how unusual this is, let’s look at the last market crash in 2008/2009. We had a decrease in price and sales volume, but the listing inventory skyrocketed to record levels (10,474 listings in July 2008). This time, we still have a decrease in price and sales volume, but the listing inventory is near record lows under these market conditions (3,476 listings in the Fraser Valley in December). This is just something very strange that we’re expecting to increase and we’re keeping a close eye on.

Prices

Now, onto prices. The average and median prices were a bit misleading last month, so the best metric to look at this month is the Housing Price Index (HPI). (See Below)

Overall, prices in the Fraser Valley went down 2.1% just last month, which is the exact same decrease we saw the month prior. With the volume of sales so low in some areas, it’s not looking like prices will stop falling anytime soon, especially if we see another interest rate hike on January 25th (which is very likely).

Remember, we have a current federal inflation rate of 6.8% (and don’t even get me started on the things that are exempt from this stat). The Bank of Canada, much like the Federal Reserve in the US, has the mandate to keep inflation at 2% (although they say it can range as high as 3% for a period of time and still be acceptable). One of the only levers they have to combat inflation is raising interest rates, which they’ve done 7 times in a row (faster than ever before). If they do this again on January 25th and then again on March 8th, we could be in for another 2+ quarters of depreciation. But if they decide to pause, we might see the market transition slower and fare better. Let’s hope for the latter!

WHAT SHOULD YOU DO?

So, my advice for this month is pretty much the same as it was last month. If you’re in the market for a bigger place, now might be the perfect time to make the move. You’ll probably “save” more money than you’ll “lose” in the current market. Plus, the higher-priced homes have come down in price more than the lower-priced ones, making it possible for many people to make a move that wasn’t possible before in the rising market.

On the other hand, if you’re looking to downsize, you might want to explore options with your broker and realtor to see if there’s a way to accomplish your goals sooner rather than later, or possibly even consider other options. It all depends on where you’re at in life, whether you’re retired or still have a working income, etc.

Cheers!