As we bid farewell to 2023, the Fraser Valley's real estate journey has been marked by resilience in the face of challenges. Elevated interest rates played a crucial role in shaping the year, leading to the region experiencing its lowest annual sales in a decade. Let's delve into the details of the Fraser Valley's December 2023 market update with a professional lens.
Annual Overview: Navigating a Complex Terrain
In 2023, the Fraser Valley recorded 14,713 sales on its Multiple Listing Service® (MLS®), showcasing a four percent decline from 2022 and a notable 23 percent drop below the 10-year average. New listings mirrored this trend, reaching a 10-year low at 29,610, marking an eight percent decrease from the 10-year average.
Despite these challenges, the composite Benchmark home price closed the year at $988,900. While this figure reflects a six percent decrease from its peak in July, it also represents a commendable five percent increase over the year.
The market's response to mid-year interest rate hikes resulted in a slowdown, even with robust sales and new listings in the spring. This equilibrium characterised the latter half of the year, albeit at lower activity levels. Looking forward, optimism surrounds 2024, with expectations of increased market activity as the Bank of Canada is anticipated to lower interest rates before mid-year.
December 2023 Snapshot: Achieving Market Equilibrium
For the month of December, the Fraser Valley Real Estate Board recorded 837 sales on its MLS®, indicating a six percent decrease from November but a promising 17 percent increase compared to December 2022. New listings numbered 942, marking a 54 percent decrease from November but a 17 percent increase from the previous December. Total active listings for December stood at 4,670, reflecting a 25 percent month-over-month decrease but a 19 percent year-over-year increase.
The sales-to-active listings ratio for December was 18 percent, indicating a balanced market. Detached houses concluded the year with a 16 percent ratio, while townhomes and apartments remained in seller's market territory at 29 and 26 percent, respectively. A balanced market typically falls within a ratio of 12 to 20 percent.
Looking Ahead: Strategic Considerations for 2024
Reflecting on 2023 as a year where both buyers and sellers adjusted to new rate realities, the Fraser Valley Real Estate Board envisions a shift in market dynamics as rates begin to ease. The expectation is that this will create opportunities for both buyers and sellers, emphasising the importance of consulting with a professional REALTOR® before entering the market.
Properties, on average, spent approximately 41 days on the market, with single-family detached homes at 40 days. Townhomes and apartments moved more swiftly at 32 and 33 days, respectively.
Benchmark Price Activity: Analysing Trends
Benchmark prices continued to slide for the fifth consecutive month, experiencing a 1.5 percent decrease compared to November. Here's a breakdown of the MLS® HPI Benchmark Price Activity:
- Single Family Detached: At $1,471,500, the Benchmark price for an FVREB single-family detached home decreased 1.2 percent compared to November 2023 and increased 7.1 percent compared to December 2022.
- Townhomes: At $826,400, the Benchmark price for an FVREB townhome decreased 1.3 percent compared to November 2023 and increased 5.3 percent compared to December 2022.
- Apartments: At $537,600, the Benchmark price for an FVREB apartment/condo decreased 1.4 percent compared to November 2023 and increased 6.9 percent compared to December 2022.
As we transition into 2024, the Fraser Valley's real estate market stands at the crossroads of change, with hopes pinned on anticipated interest rate adjustments. For now, both buyers and sellers are encouraged to stay informed and seek professional guidance to navigate the evolving market dynamics.
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