Doug Rempel | 604-859-3141

So what is the Abbotsford market doing these days? I get asked this question alot. The other question is "what is the Abbotsford Real estate market going to do?"

I can tell you what the Abbotsford market is doing, I really wish I could answer the latter with utmost certainty.

I have been a Realtor in Abbotsford for 20 years now and I can say prices have gone up, and I can say that I was right when I told my clients to buy and hold. Of course I state this tounge in cheek, of course something you bought 20 years ago will be worth more now. 

Abbotsford Real Estate, Langley Real Estate, vancouver Real Estate and all the other areas are doing the same and differerent. I know this sounds confusing but let me try to explain.

All areas have pockets that do well and not so well, all areas have types of home that are selling and types that are not, and that differs in each pocket of each area. New homes in West Van may be selling like borscht at the Mennonite food sale but condos in the same area are doing very little. In Abbotsford town houses on the East side of Abbotsford are selling great but not on the west side.

Here is a snap shot of the market in general for Abbotsford.

Detached;

Sales 55

New listings 182,

Total Listings 650

Median ptice $399,000

Sales are down, listings are up so we should see more of a decrease in price over the next few weeks and months. Unless everyone decides to keep their price then we will see sales decrease even more.

Stay tune for more up dates on the Abbotsford Real estate market and other areas as well.

Doug

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After six months of stability during the first half of 2012, property sales in the Fraser Valley dropped by 40 per cent in two months. Why the sudden change? How long will the slowdown continue? For answers, we turned to BCREA Senior Economist Cameron Muir.

Q: For six months, our sales to actives listings ratio in the Fraser Valley ranged from 13 to 15 per cent. It dropped to 8 per cent last month. What happened?

A: Home sales in the Fraser Valley began to trend lower at the beginning of the year, with a more significant downturn taking place in August and September. While there is no proverbial smoking gun, there are a number of factors at play in the market:

  • The fourth round of high-ratio credit tightening that began in 2008 was implemented in July. All of the credit loosening by the federal government in 2006 has now been pulled back. The big change in July was reducing maximum amortizations from 30 to 25 years. This was the equivalent to a 100 basis point increase in the interest rate for a first time buyer. All four rounds of credit tightening have been followed by a marked decline in BC MLS® residential sales within three months. Sales declined by 11 per cent three months following first round, 25 per cent following the second, 12 per cent following the third, and 19 per cent two months after the most recent round.

  • An unusual spike in high-end detached home sales in 2011 was not repeated this year, impacting both sales levels and average price statistics.

  • Little gains in equity and real estate markets have stalled growth in household wealth, limiting some of the positive spinoffs of the wealth effect such as second home purchases.

  • A negative spillover from an anemic 0.8 per cent employment growth in BC last year may also be exacerbating the lull in consumer demand.

Q: How does it compare to the market downturn after the 2008 recession?

 

A: To date, seasonally adjusted home sales look remarkably like 2008. However, the financial crisis was just beginning to bubble to the surface in September 2008; homes sales are unlikely to fall to levels recorded October 2008 through January 2009.

Q: How long do you project this slowdown to continue?

A: It's impossible to ascertain exactly when a market turning point will occur. However, per capita home sales are currently underperforming the economic fundamentals. I expect unit sales to rebound back to 10-year average levels over the next few quarters. There are three main reasons we can anticipate improved housing demand:

  • BC employment growth was 1.9 per cent through August this year, double the 0.8 per cent growth rate in 2011. More importantly, full-time employment has increased by 3.2 per cent, while part-time employment has fallen 2.5 per cent. This means many part-time jobs are being rolled into full-time work, a strong indicator of business profits and confidence. In Metro Vancouver, full-time employment has increased at a 3.5 – 4.0 per cent pace so far this year, the largest growth rate since the middle of the last decade.

  • Mortgage interest rates remain at or near historic lows.

  • The population base is expanding. The latest migration figures indicate 11,500 international migrants landed in BC on a net basis during the second quarter, most of whom will reside in Metro Vancouver.

Q: What are you projecting the effect will be on home prices? Why?

A: Home prices are likely to remain flat over the medium term, with some relatively small declines (2 to 5 per cent in the Benchmark) in some markets and product types. Buyers to balanced market conditions are likely to be commonplace over the next 18 months. However, I do not expect any substantial price declines in the absence of a macro-economic shock. Large price declines are typically the result of household financial disaster writ large. The typical culprit is a deep recession. I do not know of any reputable economist in Canada that expects a deep recession ahead.

Cameron Muir is BCREA's Senior Economist. His next forecast will be released at the end of October. 

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October, 02 2012 09:54:26 am, by FVREB
Categories: Statistics

For the second month in a row, property sales on the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) have decreased to historically low levels. In September, a total of 857 sales were processed on the MLS®, a decrease of 26 per cent compared to 1,165 sales in September 2011 and 20 per cent fewer than in August.

Scott Olson is the president of the Board. “Our market was very stable up until July and then within two months it changed.

“The federal government’s tightening of mortgage rules this past spring may be having an effect. We’ve seen this pattern before when rules have changed and hopefully given the strength of our local economy and stability of interest rates, this slowdown will be short term.”

Olson adds that properties offering more affordability remain in demand. “Sales of more expensive homes – single family detached – have decreased disproportionately more than the sales of townhomes and apartments. In fact, apartment sales last month in Surrey, Langley and White Rock were higher or comparable to September of last year keeping prices across the Fraser Valley resilient.”

Over the last three months, prices for all three residential property types combined have decreased by 0.4 per cent while year over year they’ve increased by 2.1 per cent. For single family detached homes, the benchmark price increased by 3 per cent in one year, going from $533,400 in September 2011 to $549,500 last month.

For townhouses, the benchmark price in September was $300,500, a decrease of 1.7 per cent compared to $305,700 during the same month last year. The benchmark price of apartments in Fraser Valley in September was $207,000, an increase of 4.1 per cent compared to $198,800 in September 2011.

Last month, the Board received 4 per cent fewer listings than it did one year ago, 2,544 in September 2012 compared to the 2,651 in September 2011. The number of active listings finished at 10,348 in September, 2 per cent higher than the same month last year, yet on par with the number available on the market in August.

It took four days longer on average to sell a detached home last month compared to September 2011 – 49 days compared to 45. Townhouses sold in an average of 57 days in September compared to 52 last year and last month, apartments took 69.5 days on average to sell compared to 63 during September of last year.

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There were 1,435 property sales processed on the Fraser Valley Real Estate Board’s Multiple Listing Service® (MLS®) in April, reflecting a 5 per cent decrease compared to the 1,516 sales in April of last year, and a slight increase over the 1,412 sales in March.

In April, the Board added 7 per cent more new listings compared to one year ago, 3,134 in contrast to 2,918 in April 2011, pushing the number of properties for sale in the Fraser Valley to 10,312, the highest level since July 2010. 

Scott Olson, President of the Board, says “To put it in perspective, in the last decade, April 2012 ranked second lowest for sales during that month, while new listings came in at the third highest, meaning it’s a good time to be shopping for a home in the Fraser Valley because selection has only been this extensive twice.


“When you combine modest sales with normal, seasonal increases in listings it helps keep house prices in check, which is what we’re seeing. Benchmark prices for all property types remain essentially unchanged from March and for townhomes and apartments, they’re on par with what they were one year ago.”

The benchmark price or value of a ‘typical’ Fraser Valley detached home as determined by the MLS® Home Price Index (MLS®HPI), increased 5.3 per cent in one year. It went from $547,800 in April 2011 to $576,600 last month.  

In April, the MLS®HPI benchmark price of a Fraser Valley townhouse was $318,400, an increase of 1.9 per cent compared to $312,600 in 2011. The benchmark price of an apartment increased by 0.8 per cent year-over-year; going from $204,100 in April of last year to $205,800 in April 2012. 

Olson adds, “There are a lot of different dynamics to our market right now – all depending on location, property type and price point. For example, some areas are seeing increases in sales and decreases in prices; while others are experiencing the reverse, so if you are thinking of buying or selling ask your REALTOR® to show you how your property type is fairing in the market overall and more importantly in your community.

“In particular, ask about the ratio of sales compared to the number of active listings for your home type. This is one tool we use to help our clients understand if the market for their home is tilted in favour of buyers or sellers or is in balance. Currently, Fraser Valley’s overall market is balanced leaning towards buyers, however each sub-market is different.”

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According to the president of the Fraser Valley Real Estate Board (FVREB), international affordability studies regarding Vancouver are misleading because they don’t reflect the reality that homebuyers purchase more affordable homes every day in neighbouring communities. 

Sukh Sidhu is a REALTOR® who lives and works in Abbotsford. “So far this month, over 50 homebuyers in the Fraser Valley have purchased a condo for $199,000 or less and over 100 families are now proud owners of townhomes valued at $399,000 or less.

“About one-third of our buyers are first-timers and two-thirds are using equity from an existing home to either buy up or downsize and they’re thrilled with the value and benefits home ownership provides.”

According to a recent Demographia International Housing Affordability Survey, Vancouver ranks the second most unaffordable major housing market in the world based on median household income and a median home price of $678,000.

Based on January sales to date, the median home price in Fraser Valley is $405,000. Sidhu says, “To buy that home, you would need about $80,000 as a household income, however to buy a typical condo or townhome in Surrey or Abbotsford for example, you need less than $60,000 as a household income.

“We’re not suggesting that affordability isn’t an issue in Greater Vancouver. In fact, REALTORS® in BC are amongst the most active proponents of strategies to make home ownership more accessible. What we are saying is that these broad, general studies don’t reflect what’s really happening within the local housing market.”

The FVREB is scheduled to release its final January month-end sales statistics from its Multiple Listing Service® during the first week of February.

 

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I DONT KNOW!

Probably what you did not want to hear but it is the truth. Now, saying that we can use the information at hand and come to an educated guess. 

When people ask me that I always try to ask what their goals are because the truth of the matter is that Real Estate will continue to go up. There is not really any earth being built these days if you know what I mean.

What is the best Real Estate to invest in? I believe your own home. Start there. If you are looking to invest, invest in your self first. PAY DOWN your mortgage. The people that have a low mortgage will usually find themselves in much better shape no matter what the economy does. I can not stress this enough. If you have a mortgage that gives you enough equity in your home you can use that to buy investments. 

As of today borrowing rates are historicaly low and it is one of the best times to borrow money. Some people are waiting for the price of Real Estate to come down which is fine but if you have a decrease in price and an increase in Rates you may find yourself no better off. Feel free to contact me for any of your Real Etsate needs

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