Home sales and home prices continued their sudden downward trend in Langley and across the Fraser Valley in June, according to new data released Tuesday by the Fraser Valley Real Estate Board (FVREB).
Single-family homes were seeing the most dramatic declines in sales, with just 65 houses sold this June.
That’s down 57.8 per cent from the 154 houses that changed hands in the same month last year, and it’s down 30.9 per cent from the 94 sales Langley saw in May. It is also significantly lower than numbers seen before the pandemic in 2019 and 2018, when 76 and 102 houses, respectively, sold in Langley
Sales of townhouses and condos were also down, although not as dramatically.
There were 90 townhouses sold in Langley in June, down 28 per cent from last year, up 12.5 per cent from May. A total of 91 condo units sold, a 37.2 per cent drop from last year’s numbers, and a 17.3 per cent decline from May’s sales.
While the benchmark prices calculated by the FVREB remained high, median and average prices were down across most categories of housing.
The benchmark price for a detached house in Langley – what the FVREB calculates is the average price for a “typical” home – was $1.789 million, down 2.7 per cent from the $1.838 million benchmark hit in May.
However the median price paid in Langley last month was $1.5 million, down one percent from May’s median price.
Median prices were also significantly lower than benchmark prices for townhouses and condos across Langley.
Although sales are weak, they aren’t that bad compred to a normal market, said Brendan Ogmundson, chief economist for the BC Real Estate Association. We’re emerging from a period of frenzied homebuying.
Now, rising interest rates imposed by the Bank of Canada to fight inflation have cooled housing markets nationwide.
Ogmundson said sales activity might find a floor relatively quickly.
But it’s definitely a tougher time to be selling a home than just a few months ago, he said.
With the mortgage stress test factored in, anyone buying now needs to be able to afford a seven per cent interest rate, up from about 1.8 per cent early this year.
“That pushes a lot of potential buyers to the sidelines,” he said.
In the FVREB’s area, which runs from North Delta through Surrey, Langley, Abbotsfor and Mission, the average price for a detached house peaked at more than $1.9 million a few months ago. It has now plunged to less than $1.6 million, however, that remains much higher than the $1 million level where it hovered between 2016 and 2019.
Since the late spring of 2020, supply of homes for sale was limited, and buyers were bidding on any home that came on the market. The sales-to-active listings ratio, which shows whether a market favours buyers, sellers, or is balanced, spiked to more than 90 per cent a few months ago. That means that for every 10 homes put on the market in a month, more than nine were snapped up in 30 days or less.
But since the market peaked early this year, that record high has plunged straight down to a 20 per cent ratio, which is considered balanced.
Unless sales pick up sharply over the summer, that ratio will likely drop further, as more homes are listed for sale than there are buyers for them.
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