Hope everyone is having a great start to the year!

We’ve been off to a great start as a team and finding success for our clients…but unfortunately, the overall market stats saw another tough month!!!  (I promise I’ll make you smile at the end lol!)

I’ll start off with one of the biggest announcements of January which was the Bank of Canada’s rate hike of another 0.25% on January 25th.  This increase marks the eighth interest rate hike in the past 12 months and was forecasted by me in my last update.  This was expected by a wide range of economists from many political stripes but what might happen next is very much debated. I’ll give you my take at the end !

PRICES

In terms of the overall price drop in the Fraser Valley, we saw the Housing Price Index (HPI) fall 1.2% from a Benchmark $955,700 to $942,200.  (This % was relatively the same for Detached Homes and larger Townhomes however smaller townhomes condos were much more resilient dropping a mere 0.3%!)  There are a number of reasons for this but as an overall picture, we’re just seeing that $400,000 to $500,000 price range being very popular in this increasing interest rate market.

For any of our current/future clients reading this (I hope there are many !) you can start to see what I’ve been saying for months; As the market falls hard we are seeing the high-end market fall hardest and the lower-end product stays very resilient in comparison.  Another way to think of it is the margin for downsizers shrink each month and if the move is one that you want to happen soon you need to be very realistic with your price or you risk taking longer to sell as you need to reduce and you’re losing far more than you’ll save on your purchase as time passes so no bueno!

SALES

Well if you thought “New Year, New Market!”…you’d be sorely mistaken LOL 🙁

We had one of the THIRD LOWEST JANUARY in terms of sales volume in the last 18 years !  We had 587 home sales in the entire Fraser Valley in JANUARY 2023 with only two years being worst, 2013 (572) and 2009(356…this period was known as “The Great Recession” ).  So with sales at record lows and prices still declining, there must be an end to things soon right?  Surely things can’t drop forever and 50% of the stations on TV keep saying we’re finally going to be in for a “soft landing” soon so let’s have it ! Right?!….Well…

LISTINGS

Well, I think normally many of you would expect listings to be…HIGH right?  If Corbin keeps saying it’s a buyer’s market and prices are falling then surely there are a lot of listings piling up as one might assume with the old ‘supply and demand’ curve!  Right!?  Unfortunately, that’s in fact the opposite of what’s happening and this is where you should pay attention.  Listings for the calendar month of JANUARY were the THIRD LOWEST they’ve ever been for a January other than 2018 (3,384) & 2022 (2,107).  What happened then?  Well, in 2018 the Government introduced the Stress Test which instantly reduced every citizen of Canada’s Buying Power by approx 20%. In JANUARY 2022 we had the second-highest month for home prices…ever!  So both of those we can all agree ain’t your average years…and…here we are!

And what do I expect to happen next?  What’s around the corner?  I don’t think I’ve ever had so many clients call me asking what I think the market will do in my entire career! I’m definitely not Nostradamus, but for those who’ve been watching since I started this newsletter, I’ve been right far more than I’ve been wrong.  I spend a lot of time researching and listening to all sides of the debate to deliver to you what I think is the best and most honest opinion of the state of the market. It’s my hope that you can use this knowledge to help prompt that conversation with your Realtor (which should obviously be me haha) if you want more specific advice for your own situation etc….but…without further adieu, here’s my take:

MY TAKE

To keep it short and sweet, inventory is record low and that’s the only thing allowing prices to gently decline only 1-2% per month.  Demand is low but supply is temporarily lower!  This won’t last long!  I can’t stress this enough.  This is a fact.  Whether you want to look at the flood of people who have remortgaged their homes at the peak of the market and are subsidizing their higher cost of living with Line of Credit Money.  Whether you look at ALL the rental properties on a variable mortgage and see how everyone who had positive cashflow on their property go into steep negative cashflow (for example, a typical home in Clayton with a Coach Home may have been $1,000 positive cashflow a month at 20% down payment before and is now $1,000 – $2,000 negative cashflow a month) How long can a regular family survive paying an extra $2,000 a month before they have to sell that property? OR Whether you want to look at all of the regular reasons that people need to move that have been more or less delayed due to bad market stats and a belief that things will improve…OR whether you factor in that the Bank of Canada will very likely continue to increase rates at least once or maybe twice more throughout this year to combat inflation which is still 6.3% Nationally and higher in some Provinces (Remember this is TRIPLE their 2% target for inflation!)..

So a few quickies…

If you’re a Downsizer and need to move in the next foreseeable future – Act quickly and be realistic with prices so you maximize the gap between your prices

If you’re a Upsizier – If you can manage the rates in the short term you could be getting a discount of up to 40% on Real Estate right now so it could be a great time depending on what selling

If you’re an investor – If you have deep pockets and can eat negative cash flow or want to buy acreage or development property then now could also be a great time to get in the market

Now I promised you something to make you smile: