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On the heels of the busiest, most unexpected December in our Board’s history and half a year of the market out-performing all expectations during COVID-19, we turned to one of the most in-demand, economists in our province for insight for you to share with your clients.
We were fortunate to get exclusive, in-depth market intelligence – specific to our Fraser Valley region – from BCREA’s Brendon Ogmundson, who as you can imagine is currently busier than a snow-making machine at local mountains due to 2020’s astounding market numbers.
He details: What happened in Fraser Valley’s market last year, and answers the million-dollar question, can it sustain in 2021?
This is part one of two with the second installment coming in next week’s NewsReal. First, we look back at a year like no other and next week, we look at what’s ahead.
FVREB Communications in conversation with Brendon Ogmundson, BCREA Chief Economist:
Q: How would you describe Fraser Valley’s real estate market in 2020? Walk us through what happened starting from what looked like a decent start of the year…?
After two years of demand being stifled by various government policies – principally the B-20 stress test – and new taxes on housing, the Fraser Valley market was set to continue to recover and record an average, typical year. However, as members know, that return to normal was swiftly upended by a worldwide pandemic that threw a blanket of uncertainty over the entire global economy.
With the industry and society in lockdown during the spring months, the housing market slowed dramatically. Sales in the early spring fell to unprecedented lows and it was anticipated that sales would remain below normal through the summer months and possibly beyond. No one knew.
Then the unexpected happened. Home sales in the Fraser Valley began to climb in the early summer, eventually setting or nearly setting monthly sales records through the fall and winter.
By year’s end, in the midst of a global pandemic, with BC facing a jump in the unemployment rate to a 30-year high, with borders closed, and with immigration halted, sales in the Fraser Valley finished the year up over 28 per cent while benchmark home prices were up over 13 per cent.
“The housing market in 2020 was nothing short of remarkable.”
Q: No one knows BC’s economy and the housing market like you, how unusual was this post-lockdown response?
The performance of the housing market in 2020 was nothing short of remarkable. The COVID-19 recession battered many sectors of BC’s economy, but looking at the housing market, it would be difficult to tell that there was a recession at all.
In a typical recession, housing sales decline as job losses and heightened uncertainty prompt potential buyers to pull back from the market. At the same time, the supply of listings accumulates as some households are forced to sell due to rising unemployment and falling incomes. The COVID-19 recession, however, has been anything but typical. Instead, this recession has seen a remarkably swift rebound in home sales and prices, not only to pre-COVID-19 levels but to historic highs.
Hindsight is indeed 2020 when it comes to 2020
Q: Did the rebound surprise even you?
A: The speed and strength of the recovery was absolutely surprising, but with the benefit of hindsight we can see clear factors that propelled the market forward.
First, the real estate industry did an excellent job in ensuring that transactions could continue without undue risk to the public. Secondly, the impact of the COVID-19 recession on the provincial labour market was not equal across sectors. Most job losses afflicted low wage sectors of the economy, like front-line service sector jobs, while employment in above-average wage sectors that tend to drive the ownership market has risen about 5 per cent above pre-COVID-19 levels.
Most importantly, a swift and overwhelming policy reponse from the Bank of Canada pushed mortgage rates to new record lows. All of those factors, along with a surge of pent-up demand after the initial crisis phase of the pandemic, meant that demand for housing returned with vigour.
Homes became all things to all people all the time
Q: We saw some specific home sale trends in the Fraser Valley due to COVID-19 – can you delve into those more?
A: There’s no question COVID-19 altered the needs of BC families as homes suddenly became a workplace, a school, an entertainment centre, and a refuge. We’ve seen a pronounced shift towards demand for larger homes and for those working from home, a commute becomes less relevant.
The extra space afforded by a single-family detached home that fulfills those needs, along with record-low borrowing costs, resulted in the sales numbers we’ve seen. In the Fraser Valley, sales of detached homes almost doubled in December, rose over 40 per cent in 2020 compared to 2019 and approached 50 per cent of total sales for the first time since 2017. So, it’s no surprise that prices for detached homes closed the year up with double-digit increases.
Sales of townhouses, a close substitute for single-detached, were up over 30 per cent in 2020, with more modest price gains of around 5 per cent year over year.
And how about apartments? How did Fraser Valley condos fare in a pandemic year?
A: Apartments began the year with challenges due to strata insurance, and as an investment vehicle or entry-level home for first-time buyers, apartments were clearly held back by the pandemic’s impact on younger workers and renters. Still, even with those challenges, apartment sales across the Fraser Valley finished the year higher and prices appreciated close to 5 per cent.
In terms of the condo sector as a whole, as vaccinations progress, the economy heals, and borders open to tourism and immigration, we anticipate demand for apartments will post a strong recovery in 2021.
Thank you, Brendon! That wraps up the first part of our two-part series on Fraser Valley’s real estate market in 2020 and 2021. Don’t miss part two next week, when Brendon Ogmundson, Senior Economist, BCREA, forecasts what’s in store for hopefully a pandemic-recovery year.
SURREY, BC – In a year when the real estate market was at a standstill for months due to COVID-19, total annual sales in the Fraser Valley still finished 12.4 per cent above the 10-year average due to unrelenting, pent-up consumer demand during the second half of 2020.
In December, the Board’s Multiple Listing Service® (MLS®) processed a staggering 2,086 sales, the strongest December on record and 81.2 per cent above normal for the month. New listings in December, were the second highest on record at 1,502. By month’s end, active inventory finished below typical levels, at 3,949 units.
The total sales volume for the year in Fraser Valley was 19,926; an increase of 28.7 per cent compared to 2019’s 15,487 sales and placing it fourth highest for annual sales since 2011.
In 2020, sales of the three main residential property types were as follows: 8,176 single-family detached; 5,102 townhouses; and 4,357 apartments. Year-over-year, sales of detached soared by 41.7 per cent compared to 2019; townhome sales increased by 31.2 per cent and sales of apartments increased by 5.9 per cent.
For more info on the current market call Garry Voigt 604 789 2140 or email firstname.lastname@example.org!
October continued to be a record breaking month for sales in the Fraser Valley and we continue to see a rise in demand and a lack of inventory, make this a ‘sellers market’ for another month. Check out the video and contact Garry Voigt for more information.
In this 5 acre, nature lovers paradise you will find a stunning CUSTOM Farmhouse with a beautiful wrap around deck. Located in desirable Campbell Valley, superb setting for a growing family on a farm, close to schools! A grand foyer leads to formal dining room & designated office. The two-tone farm style kitchen opens to the eating area & living room with cozy gas fireplace, perfect for the winter evenings & entertaining. Upstairs are 4 spacious bedrooms, BONUS Loft & large rec room. The lavish master suite features gas fireplace, huge spa like ensuite, stand up shower, walk in closet & soaker tub. Peaceful rural views from every window! Downstairs has a large 2 bed + den WALK OUT mortgage helper. BONUS mobile home for extended family. Refurbish the barn or plenty of room to build a shop!
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The Fraser Valley Real Estate Board processed 2,231 sales on its Multiple Listing Service® (MLS®) in September, an increase of 66.1 per cent compared to the same month last year and an increase of 9.4 per cent compared to August 2020. This is the highest recorded sales for September in the history of FVREB.
In the last three months, Fraser Valley has seen a defined shift in demand towards single family detached homes with sales in July through to September garnering 47 per cent of the three main residential types, compared to 43 per cent during the same period last year.
*Stats above based off data from Fraser Valley Real Estate Board stats centre.
For more information contact Garry Voigt – 604 789 2140 – firstname.lastname@example.org
Welcome to Station 54! This 2 bath & 1 bed + den (Being used as a second bedroom) is very centrally located in Langley, with shopping and restaurants right across the street! This unit faces east with an abundance of trees for privacy. Nice light, bright and open floor plan. Kitchen has newer stainless steel stove and fridge plus an eat up island that opens up to the generous sized dining and living room, perfect for entertaining! East facing balcony directly off of the living room, perfect for morning coffee. The master bedroom is a great size with his and hers closets leading to the ensuite. BONUS 2 piece powder room off the entrance for company! Walk to everything Langley has to offer, parks, shopping and recreation! OFFERED AT $329,800
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WELCOME TO LATITUDE! This UNIQUE ground floor, CORNER, 2 bed & 2 bath unit has NO neighbours, nobody above or below! This past SHOWHOME unit received extras including french doors accessing to a large fully fenced patio! This home features a bright, open floor plan, high end kitchen with stainless steel appliances, eat up island and ample cabinet and counter space with under cabinet lighting. 2 good size bedrooms & 2 full baths, master ensuite has double sink with frameless shower! + BONUS $3500 in custom closet organizer upgrades. The building has great features such as fitness room, party room with pool table & kitchen, + very secure fenced 8000 sq/ft courtyard with outdoor play area & garden blocks. Steps to transit, Panorama Village and walkable to Elementary and Secondary schools.
For more information call or email Garry Voigt 604 789 2140 firstname.lastname@example.org