Market Update

The number one question on most of my client's minds revolves around interest rates and real estate prices. We are certainly dealing with unusual circumstances in an unprecedented market. 

For the most part, most experts agree that low-interest rates will continue for the short and medium-term. As for real estate prices, especially in the Vancouver and the Fraser Valley regions, well, that depends entirely on who you listen to. CMHC continues to prescribe to the negative mantra that there will be declines in housing prices in our future, maybe as early as next year. However, we are experiencing a surprising uptrend right now that no one foresaw, and CMHC certainly didn't predict.

The real estate market numbers in our market for August and September have been blowing all expectations. Single-family homes in the Fraser Valley are enjoying multiple bids, and even selling over asking price. Today, I received confirmation that one listing just received 17 competing offers! Think about that! This is great for the seller, but it is extremely challenging for the potential buyers and their realtors.

The following update from one of my lender partners that sums up our current market:

"The latest employment numbers, coupled with the September reports from the Toronto and Vancouver real estate boards, have triggered a lot of optimism about Canada's economic recovery and the state of the housing market.

Statistics Canada reports the economy added 378,000 jobs in September, and the unemployment rate dropped to 9%. Toronto realtors posted a record-breaking 11,083 sales last month, up 42% from a year earlier. The benchmark price rose 14%, y-o-y. Vancouver had its best September ever: 3,643 sales, up more than 56% y-o-y. The benchmark price rose by nearly 6%.

These numbers continue to defy expectations, so caution and patience need to be the guiding principles as we try to figure out what will happen next.

The employment numbers – which are a key indicator of economic health – surely were boosted with the reopening of schools. Parents who had been staying home to look after their kids became available for work again. But many are not back to full employment. The number of mothers working less than half their usual hours was 70% higher last month than before the shutdowns. For working-fathers, the number is 23% higher. Overall, employment is still 25% lower than it was before the pandemic. And many of those jobs will not be coming back.

Further job growth remains in jeopardy as the two biggest jurisdictions in the country, Ontario and Quebec, re-introduce closures and restrictions to slow the spread of COVID-19.

At the same time, signals from the housing sector are mixed. Realtors continue to forecast rising sales and prices. But the market is imbalanced. Most of the gains are coming in "ground-oriented" units – singles, semis and townhouses. Condos are seeing significantly smaller increases.

Canada Mortgage and Housing Corporation continues to forecast that price declines, in the 10% area, will start showing up sometime around the middle of next year. Moody's Analytics predicts a national "peak-to-trough" price decline of 7%. Both reports cite employment shortfalls, reduced immigration and increasing loan delinquencies."

If you need a preapproval for mortgage financing before you make an offer, or want to take advantage of these historic low-interest rates, call 778-246-2547. I'm here to help you make an informed decision that is right for you and your family. In most cases, my services are totally free, and you can rest easy that your next move is right!