I have analyzed all of the stats for the 1st Quarter and here are some insights to our market right here in the Fraser Valley:
19.42% of the houses that come on the market are selling on average. That trend is increasing and part of that increase is seasonal. However, these are some factors that are causing our 1st Quarter activity to be stronger than it was last year:
1) Interest rates: The big banks have reduced the mortgage rates to be back at our all time low levels again. 5 year borrowing is under 2.99% and the prime rate is at 3.0%.
2) Confidence in the market: Prices are stable as the market activity have picked up. We are shifting from a Buyer's Market to a Balanced Market.
3) Increase in the 1st time Buyer Property Transfer Tax threshold: Last year that threshold price was $425,000. This year it has just been increased to $475,000 allowing Buyers to spend $50,000 more without having to pay the Property Transfer Tax. This is helping the entry market sell more homes which in effect causes the next market to sell more homes as those Sellers become Buyers and the market turns.
For the 1st quarter we have seen our detached housing market average with 5.6 months worth of inventory and our condo market with 8.33 months. Detached houses are in a balanced market and our attached homes are in a Buyer's market.
Now... there are some areas that are hotter than others. The ones I see as good opportunities for Buying and for Selling are:
For buying houses: Surrey as their is a good selection of houses available. The larger inventory levels helps put downward pressure on house prices and the sales activity is also at Buyers market activity level which allows us more of an opportunity to look, compare and negotiate.
For selling: North Delta, Cloverdale and Langley. This is where we are seeing the highest percentage of homes selling and the lowest amounts of monthly inventory. Levels that we have in a Seller's market.
For buying condos: Surrey and South Surrey as their are some great selection of homes available. Some great amenities as well as... improvements made to the accessibility to these areas.
For selling condos: North Delta and Cloverdale. These two markets are shifting and are in a Balanced Market and moving towards a Seller's Market.
I have put the Percentage of homes selling as well as the months of inventory in a graph below for your review.
An average of 19.42% of the houses listed are selling in their first month.
An average of 13.9% of the attached homes listed are selling in their first month.
An average inventory of 5.6 months for detached houses which is a balanced market.
An average inventory of 8.3 month for attached homes which is a Buyers market.
Posted by Tony Cikes
What is going to be interesting moving forward into our 2nd quarter is the impact that the raise in lenders insurance premiums is going to do on the market? As of May 1st, CMHC and Genworth is increasing it insurance premium .05% to .40% percent when they lend on high ratio financing (Less than 35% down).
This is a fairly substantial increase on certain loan to values. For example on a 650k price with 10% down (585k mortgage) on a 25 year amortization, the premium jumps from $11,700 now to $14,040 after May 1st.
If you were thinking of Buying or anyone you know is thinking of Buying... now might be a very good time. One will save on the insurance premiums as well as interest with the current lower interest rates. I have a feeling that 5 year monies will not be available for under 2.99% much longer.
If you would like me to send this info to someone you know or, would like these statistics for the Metro Vancouver market and/or for the Greater Vancouver market, please let me know in the comments or sending me a message via the contact us form.