What goes up must come down.
Langley and Surrey, which saw huge price increases for detached homes during the pandemic real estate boom, are now seeing the steepest price drops in the Lower Mainland, according to agents with an AI-driven property form.
Hao Li, an agent with HouseSigma, said that Langley was among the hottest housing markets of the last two years.
As of the end of April, Fraser Valley Real Estate Board (FVREB) statistics showed that the average and benchmark prices of a detached home in Langley were almost the same – $1,785,000 for the benchmark, $1,796,697 for the average. The median price was lower, at $1.64 million. Benchmark prices are based on the average price for what the FVREB considers a “typical” local home.
However, HouseSigma’s data shows that as of May 17, the average price for a detached home in Langley had dropped to $1.5 million, down 14.3 per cent from the $1.75 million average in February.
That was the second-steepest drop that HouseSigma recorded, behind only Surrey, which saw a 16.3 per cent drop in average prices, from $1.9 million to $1.59 million.
At the beginning of the pandemic, Li said that people looking to upgrade the size of their home on a relative budget were drawn to Surrey and Langley.
“The people who went in first actually got great deals,” he said.
But prices skyrocketed as more and more people headed out from Vancouver and the inner suburbs to the South of the Fraser area.
Initially, almost everyone buying a home in Surrey and Langley was buying it for personal use.
But the rising prices drew other buyers.
“They also brought in a lot of investors,” Li said.
There was also a lot of land-assembly purchasing going on, as single-family homes in places like Langley City, Willoughby, or Brookswood have been bought up to facilitate future re-development, Li noted.
Average prices can swing more wildly than benchmark or median prices, because they can be swayed by the sales of a few low- or high-value homes.
But HouseSigma’s data showed a broad drop in average prices across almost all of the Lower Mainland. Maple Ridge’s average price was down by nine per cent, Vancouver’s dropped 5.6 per cent, and most other communities were down by about 2.5 to 2.8 per cent.
Only West Vancouver and Richmond saw the average price of detached homes increase from February to mid-May.
Rising interest rates over the last few months have been singled out by economists and realtors as a key reason why the price of housing has started to flatten and, in some parts of the country, decline somewhat.
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