Median Pricing
To start this discussion let’s look at the median pricing for the four housing classes we examine in the Fraser Valley; Apartments, Townhomes, Detached homes and homes with Acreage.
Apartments Median Pricing;
April 2020- $370,000
March 2020- $385,000
April 2019- $365,000
Townhomes Median Pricing
April 2020- $575,000
March 2020- $589,000
April 2019- $571,000
Detached Median Pricing
April 2020- $970,000
March 2020- $1,000,000
April 2019- $932,000
Homes with Acreage
April 2020- $1,446,000
March 2020- $1,900,000
April 2019- $1,540,000
My Interpretation
In the beginning of 2020, it appeared we were going to have another year of growth in the Real estate market in terms of price, interest rates were stabilizing, and we were seeing healthy markets across all housing classes. The COVID-19 has reversed that growth, while prices have dropped marginally, I feel the real indicators of the effects right now are the drop-in sales and sales to actives across all property classes. This data will be detailed below.
Sales to Actives Ratio (S/A)
Now let’s look at the Sales to Active ratio. I love the sales to actives ratio as a metric to determine the speed of the market and who is favoured in specific housing classes. If the sales to actives ratio is between 12% & 20%, we define this as a balanced market. Less than 12% favours the buyer, greater than 20% favours the Seller.
Apartments (S/A)
April 2020- 11 % (buyer’s market)
March 2020- 23.9% (seller’s market)
Shifted from a Seller’s market to a Buyer’s market in one month
April 2019- 22.1% (seller’s market)
Townhomes (S/A)
April 2020- 21.4% (seller’s market)
March 2020- 38.5% (seller’s market)
17.1% drop in absorption in one month
April 2019- 27.4% (seller’s market)
Detached Homes (S/A)
April 2020- 12.7% (balanced market)
March 2020- 26% (seller’s market)
13.3% drop in absorption in one month
April 2019- 15.2% (balanced market)
Homes with Acreage (S/A)
April 2020- 4.3% (buyer’s market)
March 2020- 9.5% (buyer’s market)
April 2019- 7% (buyer’s market)
My Interpretation
The market is slowing down dramatically across all housing classes with the biggest shift being in townhomes with a 17.1% drop in the sales to active ratio.
Active Listings
Quite simply, active listings are the number of homes for sale in a given housing class across the Fraser Valley.
Apartments
April 2020- 1,358
March 2020- 1,390
April 2019- 1,690
Townhomes
April 2020- 935
March 2020- 997
April 2019- 1,380
Detached Homes
April 2020- 2,102
March 2020- 2,225
April 2019- 3,213
Homes with Acreage
April 2020- 369
March 2020- 367
April 2019- 444
Interpretation
Across all housing classes there is historically low inventory. This coupled with lower sales to actives ratios across all housing classes will make this one of the slowest markets we’ve seen in years.
Sales
The number of transactions in a given housing class.
Apartments
April 2020- 150
March 2020- 331
April 2019- 373
Townhomes
April 2020- 200
March 2020- 384
April 2019- 378
Detached Homes
April 2020- 266
March 2020- 578
April 2019- 488
Homes with Acreage
April 2020- 16
March 2020- 35
April 2019- 31
Interpretation
There was 50.5% less transactions across every housing class in April 2020 to March 2020. To me this statistic is the biggest indicator of what is happening to our market, it is slowing down dramatically.
New Listings
Listings that came onto the market in a given month.
Apartments
April 2020- 372
March 2020- 714
April 2019- 763
Townhomes
April 2020- 303
March 2020- 573
April 2019- 718
Detached Homes
April 2020- 506
March 2020- 989
April 2019- 1360
Homes with Acreage
April 2020- 56
March 2020- 82
April 2019- 128
Interpretation
Quite simply, people are not selling their homes at the same rate as they normally would. Whether they are facing financial hardship because of the crisis and are putting off the upgrade they had planned, or they don’t want to deal with moving and house hunting during these trying times the stats are showing historically low rates of new listings.
Summary
Where I see the biggest opportunity right now-
“Be fearful when others are greedy and greedy when others are fearful.”
Warren Buffett
If you are still in position to buy a home, I wouldn’t neccesarily stop your plans. Before the pandemic it was looking like we were going to be in a Bull market, while our economy is in a recession now this too shall pass. There is opportunity now to take advantage of what is the first buyer’s market we have seen in years.
My advice to Seller’s
Do you really need to sell right now?
There are still transactions happening and with historically low inventory you will still get attention if your home is priced and marketed well. If your income sources haven’t been impacted by the pandemic and you have been thinking of upgrading from a townhouse or condo to a detached home this could be an opportunity for you as detached homes have dropped from a fairly strong seller’s market to a very weak, almost buyer’s market.