The Fraser Valley real estate market, much like many other regions from coast to coast, is experiencing a housing supply crunch. The area has always been sought-after for its green space, temperate weather and its proximity to Vancouver – British Columbia’s metropolitan hub. During the recent real estate boom, the Fraser Valley housing market has seen record-high sales and record low inventory – making it highly competitive for prospective buyers.
Fraser Valley is a region that sits in the southwestern corner of British Columbia, renowned for its abundance of natural beauty; a colourful patchwork of fields, intersected by a wide river and flanked by the steep Cascade mountains. The total population of the area is just under 300,000 people, making it one of the larger geographical regions in the province. Fraser Valley encompasses six municipalities: Abbotsford, Chilliwack, Harrison Hot Springs, Hope, Kent and Mission.
Fraser Valley Real Estate Sales & Supply Out of Balance
Fraser Valley concluded a hot summer with exceptionally high unit sales. This, combined with limited supply, has created tight market conditions by the end of August. Come month-end, the Fraser Valley Real Estate Board recorded 2,087 residential housing sales during the month of August. This is the second-highest number of sales on record for August, second only to August of 2005. August 2021 is also up 4% month-over-month, and up 2.4% year-over-year.
Further escalating competition for Fraser Valley real estate was the lack of new listings on the market. Just 2,107 new homes hit the market in August – a stunning 36.3% decline compared to August 2020, leaving inventory sitting at just 4,077 units at the end of the month. Larry Anderson, President of the Board, commented, “Homebuyers are facing one of the worst supply shortages in Fraser Valley history. Our sales are over 30% above normal, while our housing stock is at levels last seen in the early ’80s. To put our supply and demand situation in perspective, for every 100 townhomes on the market in August, Fraser Valley REALTORS® sold 94. The single-family detached and condo markets also remained in strong seller’s market territory. Persistent demand and lack of supply continues to put upward pressure on home prices.”
The summer of 2021 closed out with single-family residential units averaging a price 31.1% higher than that of August 2020. This further indicates that the Fraser Valley real estate market strongly favours sellers.
After another red-hot summer, demand for Fraser Valley real estate remained at an all-time high. September 2021 saw 1,866 properties change hands. While this is down compared to August, it is the second-highest level of unit sales on record for the month of September. Anderson adds, “Demand for residential homes of all types is strong in the Fraser Valley with more sellers returning to the table in September, which is expected at this time of year.”
New Fraser Valley real estate listings were well below the levels from one year ago, with just 2,342 homes hitting the market. This represents a 33.4% decrease compared to September 2020. While this is an increase of 11.2% compared to the previous month, the market remains out of balance with just 3,812 units of inventory. Units available for sale at the end of September were 6.5% lower than August 2021, and nearly 50% less than September 2020.
Lack of supply and consistently high demand has impacted prices in the region. The average price of a single-family detached home in September was $1,362,220 – up 31.9% year-over-year. “While we’ve seen a solid increase in new listings compared to August, market conditions continue to be challenging for buyers. Considering the demand across the region, the increase is simply not enough to bolster the inventory required to create greater balance in the market,” states Board President Larry Anderson.
Will Fraser Valley’s Housing Market Cool as Winter Approaches?
While the pandemic has thrown the majority of Canadian real estate markets off-kilter, the Fraser Valley housing market is experiencing the effects of the last 19 months quite strongly. It’s no secret that this market strongly favours sellers. With high demand, low supply and consistently rising prices, the market needs more supply to pull the pendulum closer to balanced territory.
Source: Fraser Valley Real Estate Board