Price drops, rising interest rates impacting Langley housing market

There are more houses for sale, but few buyers as falling prices and rising interest rates continued to impact the Langley real estate market over the last month.

“It’s all about inventory and demand,” said Joanne Bonetti, a Langley realtor.

Statistics released on Tuesday, Oct. 4 by the Fraser Valley Real Estate Board (FVREB) show that sales of all types of homes in Langley dropped year-over-year, while the number of homes listed for sale continued to climb.

There were 73 single-family homes sold in Langley in September, a 21.5 per cent dip from the same month in 2021, but up more than 10 per cent from August.

While sales of houses were relatively steady, just 51 townhouses sold , down 55.7 per cent year-over-year, and 60 condos, down 5.4 per cent. Condo and townhouse sales also dipped somewhat from August’s numbers.

After a year in which the price of housing skyrocketed, house prices have now plunged back down almost to where they were a year ago. Condo and townhouse prices are still considerably higher than a year ago, but are also on the decline.

The benchmark price – the average price of a “typical” Langley home – was $1,556,000 for single family homes in Langley last month. That’s just 2.2 per cent up from the same month last year, and down 4.1 per cent from over $1.6 million in August.

The benchmark price was over $1.8 million at the peak in May.

The benchmark for a townhouse was $871,700, up 16.6 per cent year over year, but down slightly from August, while condos were going for $599,800, 16.8 per cent above last year’s numbers, but down 1.6 per cent from August.

The rapid decline in prices is making some people simply take their houses off the market, said Bonetti.

During the rapid run-up in prices that began in mid-2020, some people were afraid to list their house, because they were worried they wouldn’t find anything they could afford to move into, Bonetti said.

Now people are seeing prices come down, but higher interest rates are still making many homes unaffordable, she said.

“This is not a sellers market,” she said. “But because of the rate changes, buyers can’t afford what they thought they could.”

Bonetti said on the ground, she’s seeing homes selling for lower than their neighbouring properties did just a few months ago.

PREVIOUSLY: Home sales down by half in Langley compared to last year

PREVIOUSLY: Home prices for Langley housing down sharply from peak just months ago

She just sold a home in Brookswood for $1.15 million, that would have gone for $1.3 million or more at the peak of the market, earlier this year.

Another factor is that people who have bought housing as an investment in 2017 and 2018 are now seeing their mortgages reset to much higher interest rates, and are deciding whether to re-mortgage, or just sell and cash out, Bonetti said.

Langley actually saw a stronger market for single family homes than most of the region covered by the FVREB.

Across the area that stretches from North Delta to Abbotsford, just 897 homes of all types sold last month.

That’s down 51.9 per cent from 1,866 that sold in the white-hot market last year, and down 11.8 per cent from the 1,017 homes that sold in August.

“There’s no question that interest rates continue to be a primary factor in the market trends over the past six months or so,” said Sandra Benz, president of the FVREB. “The sales slowdown we’re seeing reflects a level of caution exercised by buyers, who are likely waiting for the market to settle further before jumping in. In the meantime, we anticipate prices may continue to decline across all categories.”

The average detached price of a home in the Fraser Valley first crossed the $1 million just five years ago, in 2017.

During the pandemic, interest rates were slashed and housing sales took off, hitting an average price of $1.9 million earlier this year.

The drop from that peak has been almost as steep as the increase. This month, FVREB stats show the average is now just below $1.4 million across the region.