The story in real estate in Langley and its neighbours in February was one of plenty of buyers, but not nearly as many sellers, according to data released by the Fraser Valley Real Estate Board on Tuesday, March 2.
It might be part of what Simon Fraser University housing expert Andy Yan calls the ‘Great Congestion,’ as plenty of people want to buy, but far fewer want to move out of their homes.
Langley saw big increases in the numbers of detached houses and townhouses compared to previous years, with prices jumping sharply as well.
A total of 122 detached homes sold in Langley in February, up 34.1 per cent from the same month a year earlier.
Townhouses were going even faster – 206 sold, a 142.4 per cent jump year over year.
In condos, 172 sold, up 132.4 per cent from the same month a year ago.
The benchmark price for a detached home in Langley was $1.21 million, up from $1 million, a 20.8 per cent jump from a year earlier. Townhouses hit $611,600, up 9.4 per cent, while condos were at $415,600, up 5.9 per cent.
While the number of homes sold were up sharply, the number being listed for sale was up – but not nearly as much.
New listings for detached homes were up 17 per cent, for townhouses 63.2 per cent, and for condos 60.9 per cent.
But total active listings were down for both houses and townhouses, 31.6 per cent and 12.5 per cent, respectively. Condos saw active listings rise 3.1 per cent compared to last February.
Yan, who heads up the City Program at SFU, said that there are multiple forces at work in driving the unusual real estate markets we’ve seen over the latter portion of the pandemic.
After an initial slump in real estate sales in March, April, and early May, sales rebounded sharply across Langley and the region. They stayed high, all the way through the traditionally dead time of mid-winter, and continued to break records for the FVREB’s sales numbers.
The question, Yan says, is who are the buyers, and who are the people who live in the most desirable units – single family homes?
People are buying homes for a variety of reasons. Low interest rates have made it cheaper to borrow money, and many people with stable jobs have also saved up a lot of cash because the pandemic curtailed spending on things like vacations. With down payments in hand and low rates, they also wanted some more room, including for home offices many more people are working from.
But the people who are currently in the existing stock of single family homes may be reluctant to sell.
“Do they want to move?” Yan said. “It all comes together and compresses itself.”
Seniors who might be thinking about downsizing might loathe to move during a pandemic. Others might not want to take the step from independent living to assisted living when COVID-19 has spent the last 12 months tearing through seniors homes.
Beyond that, more and more people are just living longer, and staying in their homes longer.
The real estate market is dealing with a trend of extending lifespans that has been building for years, Yan said. Decades back, economic calculations didn’t really account for a large number of people older than 65 because not that many people lived long into their retirement years. Now healthy folks can expect to live to 85, or beyond.
“It is one of the single greatest gifts that our society has given each other, an added 20 to 25 years of life,” he said.
It also means that younger generations are backing up behind their elders, who are staying put, especially during a pandemic that is far more dangerous for them than for younger folks.
On the condo side, it’s hard to say what will happen with that market, which while busy is not seeing the same frenzy as single-family homes or townhouses.
If there’s a shift towards buying houses, more condos may wind up on the rental market – but Yan said that more rental properties and higher vacancy rates may not mean lower rents.
The problem is that rental properties have been financialized and commodified over the past few years, Yan said.
That means that the real estate value of an apartment building may be more important to the owner than whether a few units sit empty. Lowering rents could attract more tenants, but it also reduces the resale value of the whole building.
“That is perhaps a greater loss than a few months of rent,” Yan said.
By the same token, if condo builders are finding it harder to sell units over the next few years because people have sought out detached homes, they might offer incentives rather than lowering sale prices.
It wasn’t that long ago that new condo developments offered incentives like cash back or even new cars to buyers – a way of sweetening the deal without actually reducing the sticker price of the unit.
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