The real estate cycle in the Fraser Valley appears to have come full circle since the last high-water mark in 2005, but this time around realtors are dealing with an inventory crunch for property across the region.
In 2015, sales came close to breaking records set in 2005. The Fraser Valley processed 21,095 sales, just 187 shy of 2005 numbers. However, the total dollar volume of sales was a record-setting $12.1 billion, $4 billion more than in 2014.
The average price for a single-family detached home in the Fraser Valley also set new records, rising to $672,400, an increase of 17.3% compared with December 2014. Jorda Maisey, president of the Fraser Valley Real Estate Board (FVREB), said last year was like no other in the business.
“I’ve been in the profession for almost 25 years, and a year like 2015 is rare,” Maisey said. “The market took off early in the spring and never let up. Across all our communities, we experienced very strong demand, in particular for detached homes and townhomes, which by the second half of the year clearly was affecting inventory levels and putting upward pressure on prices.
“We’ve been helping many of our buyers by recommending they consider newer, affordable housing types and locations that they may not have considered before.”
Chris Shields, a realtor with Sutton Premier Realty based in Surrey, said it’s also a far cry from where the market was in 2005, even though sales were high.
“I remember a decade ago, people making a decision on a half-million-dollar house – now they can’t go home and sleep on it. They either have to jump on it or buy it; homes are selling within a day.”
In 2005 the FVREB posted record-breaking numbers in virtually every category. With 21,282 sales processed through the Multiple Listing Service (MLS), there was a 17% jump that year compared with 2004, breaking a previous record set in 1992. The total dollar sales volume was $6.9 billion, a 30% increase from the previous year.
At the end of 2005, the average price for a single-family detached home in the Fraser Valley was $410,246, a 17.5% increase from 2004.
Sales have yet to eclipse that monumental year; the closest the Fraser Valley has come to breaking it was 2015.
Shields got his licence in 2005 as part of a career change after he’d sold a house of his own.
“It was exciting the first couple years; it was busy,” Shields said. “It was a great time to get into the industry because things were up, and it’s a little easier to find clients to work with when the market is active like that.”
However, by the end of 2008, real estate had taken a hit along with the rest of the global economy. Sales declined 30% from 2007, and the average price of a single-family detached home in the Fraser Valley dropped 6.5%, from $496,391 in December 2007 to $464,189 in December 2008.
Overall, in 2008, only 13,194 sales were tabulated by the MLS in the Fraser Valley, close to half the numbers posted in 2005. Shields said it was a learning experience for him.
“It was very interesting when we had the global economic meltdown. For our business it was like a tap shutting off. We were so busy and then there was nothing happening, so there are definitely lean times in this business and good times, and you have to plan for them.”
However, unlike the United States, where the subprime mortgage crisis destroyed large parts of the housing market, Shields said Canada weathered the economic storm.
“We compare ourselves to south of the border, and I think we were relatively unscathed in the whole scheme of things. It was short-lived; things started climbing again very early in 2009, and we went back into a market that we could work in.”
By the end of 2009, Fraser Valley real estate sales had rebounded.
“In 12 months, we went from the worst January in 20 years to the third best December,” said former FVREB president Paul Penner in a 2009 year-end release.
“Homebuyers took Boxing Day shopping to new levels with some Fraser Valley realtors showing multiple homes per day between Christmas and New Year’s.”
In 2009, the Fraser Valley had 16,721 sales, an increase of 26% from 2008. The benchmark price for a single-family detached home also came back up to $497,732 in December, compared with $464,189 in December 2008, a 7.2% increase.
Shields said the supply-demand issue forced some realtors to adopt new tactics in 2015.
“Some realtors are holding off on showings a lot more now. They’ll put a listing on the market and say, ‘No showings until next Saturday, and we won’t look at any offers until next Sunday.’ So they’re controlling the flow of traffic through better and driving multiple offers for the seller, so it’s a great market for a seller.”
Maisey said that amid the high volume of sales, Surrey was again the tip of the spear with record-setting construction levels and a booming population.
She noted, however, that not everyone is happy about the pace of the real estate market, given the low amount of inventory available across the Fraser Valley.
“Consumers may assume that a market such as it was in 2015 is good news for realtors. Not always so. Our goal as professionals is to be able to serve the needs of our sellers and buyers to the best of our ability, and serving our buyers can be very challenging when inventory is as low as it’s been for an extended period.”