It sounds like an unfathomable statistic within the realm of Lower Mainland real estate. The average single-family detached home in the Fraser Valley is now sitting on the market for more than a month before being sold.
Long seen as an affordable alternative to Vancouver’s astronomically high prices for homes, the Fraser Valley housing market now seems out of reach for the average buyer as well.
Fraser Valley Real Estate Board statistics for November show the benchmark price for a single-family detached home increased only 0.1% to $972,700 compared with October. New listings for single-family homes dropped substantially from the previous month (-9.2%), and active listings for all property types in the Fraser Valley also declined (-6.5%) over the month.
Anne McMullin, president and CEO of Vancouver-based non-profit Urban Development Institute, said she’s not surprised by the cooling of the market for single-family homes in the Fraser Valley because it’s also happening all over the Lower Mainland.
“People want to blame everything else, but the housing market is still a local market,” she said. “When you start to get over a million dollars [for a property] in the Fraser Valley, there’s very few people that can afford that. There is a softening in the high-end single-family market because the demand now is for things that are less expensive, so you see the ramping up of things that are less expensive.”
McMullin said the Fraser Valley appears to have hit its “threshold” of how much people are willing to pay for a single-family home in the area.
“You might say that on the North Shore [of Vancouver], that threshold is about $2 [million] or $2.5 million. And on the west side it’s about $3.5 million, and sure you’ll get a $16 million home sold every once in a while, but they don’t go much more than that.”
A mass exodus of gen-Xers and baby boomers appears to be expanding the glut of single-family homes for sale across the Lower Mainland, which could also signal some troubling financial trends on the horizon. According to a report titled The Future of B.C. Housing by Resonance Consultancy, 34% of Metro Vancouverites plan to sell their homes and downsize within the next five years. The report found that 60% of those surveyed also plan on using the sale of their houses to fund their retirements.
As well, the report found that Metro Vancouver millennials – those born between the early 1980s and early 2000s – are not willing to leave the area, even if real estate prices remain unaffordable. More than three-quarters of respondents said they had no plans to move out of the region, but also weren’t willing to pay for properties outside of their financial comfort zone. This gap between buyers and sellers is showing up in single-family home sales statistics all over the Lower Mainland.
McMullin said the typical large, multi-room house with a backyard is something that was specifically tailored to baby boomers, but is not something millennials are interesting in moving into.
“If I think of my own age group [baby boomers], these big, single-family homes have really only been around for the last 30 years. When you think of homes built pre-1960s, the homes are small, it’s really only been in the past couple of decades that the homes got big and you went out to the suburbs.”
Resonance’s report also shows the average British Columbian is more than willing to sacrifice space in today’s market. Approximately 46% of respondents said they would consider living in a smaller space if it were close to various amenities such as transit, shops and restaurants. That number jumped among millennials (60%). Also, 42% said they would be willing to live in smaller spaces if it meant they could live closer to work, and 35% said they would give up having a private backyard for a community park nearby if it meant a cheaper real estate transaction.
Gopal Sahota, the president of the Fraser Valley Real Estate Board, said the industry in the region is listening to demand, and responding by finding apartments and townhomes, which are only staying on the market for 17 and 21 days, respectively, for buyers.
“The stats and numbers are all showing that,” Sahota said. “Single-family homes are great, but they’re just not in demand like they used to be.”
The cooling of single-family home sales has been a trend for months within the Real Estate Board of Greater Vancouver’s jurisdiction. The average single-family home is sitting on the market for about 43 days according to November stats, and the benchmark price is down 0.1% from October of this year, currently at $1,608,000.