Let’s start this month with something curious that appears to be happening in the detached home market in Metro Vancouver. You may recall last month when I reported the Benchmark price for a residential property had surpassed the $1-million mark for the first time in July. I said then that this may have created a psychological attitude from a buyer’s point of view, where many home hunters make the decision to look at another market segment, either townhouses or condominiums. This month I can tell you that’s precisely what is happening. But it remains to be seen if I was completely correct or only half right on the whole equation. While there has been a clear spike in sales of townhouses and condominiums, my prediction was that detached family homes would rise in price at a rate faster than before the $1-million threshold. This latter speculation has not yet happened, although it’s too early to detect a trend. The Benchmark price for a detached property in August was $1,615,100, which is only a 0.2 per cent increase over the preceding month. The increase from June to July was 2.1 per cent so for the time being anyway, the detached home price appears not to be escalating. This might be for various reasons, but for anyone wanting to get into a detached home, they should probably move quickly. It’s a safe bet that the price in the Metro Vancouver is not going to decline. What may be keeping the rate of increase this low is an unexpected increase in the supply. Compared to August a year previous, sales of detached homes were nearly 23 per cent higher this year. It may well be that a segment of sellers also held the $1-million mark as their selling point, so I will stick with my longer-term prediction that the rate of increase will pick up once this segment clears in sales.
Metro Vancouver
Looking at the rather hot Metro Vancouver market in August for attached properties, the Benchmark price for a townhouse was $778,300 and for a condo, $626,800, compared with the previous month at, $763,700 and $616,600 respectively. You can see that prices are moving up quickly in this market segment so I have analyzed for you here some areas you may want to check out. I have selected a Benchmark price range for August from the low $600,000s to the low $700,000s combined with areas with lowest month-over-month rate of increase. I think this may be good guide for a large segment of my clients.
For townhouses, Port Moody was at $608,700 with a last month rate of increase of 1.9 per cent. For New Westminster: $652,700 with a last month rate increase of 0.9 percent. For the top of my selected range I am using two areas close in both geographical location and price: Tsawwassen ($720,100 with a negative last month rate of increase of 0.9 per cent) and Ladner ($733,900 also with a negative last month rate of increase at 0.6 per cent). While a single month does not itself show the rate of increase will remain low in the long term, in these cases I think sit is reasonably good indicator of greater price stability than some other areas.
For condominiums, I have selected a Benchmark price in a range from the low $400,000s to the low $500,000, again combined with lowest last month rate of increase. Port Coquitlam was at $412,200 with a last month rate of increase of 2.8 per cent. Coquitlam was $476,900 with a last month rate of increase of 3.8 per cent. New Westminster: $480,000 with a one-month rate of increase of 2.8 per cent. And Vancouver East at $529,000 with a last month rate of increase of 0.9 per cent. As with townhouses, the single month rate of increase is not a long-term predictor, but I think it’s a reasonably reliable indicator for price stability for at least the short term.
Fraser Valley
I’m betting September will be month that the Fraser Valley Composite Benchmark Price (CBP) for a residential property goes over the $1-million mark, as it did in Metro Vancouver in July this year. If you’ve been following my contest, I have been offering a prize to the person who guesses closest to the CBP over $1-million and the month in which it will occur. The CBP for a residential property in the Fraser Valley for July was $966,000. To reach $1-million would require a 3.6 per cent increase over July, which is a big jump for one month. I think it will take two months and if I’m correct we’ll see that when the September statistics are out next month. So, this may be your last chance to make a guess and win a customized Comparative Market Analysis (CMA) of your current property. Each CMA is an estimate of the owner’s house value using its condition, location (neighbourhood study), real estate market study, and recently sold homes in the same area. Send me your guesses (sibo@sibozhang.com) by the end of this month (September 2017). Our winner(s) will be announced in a coming newsletter and on my website. Be sure to include your name and phone number so we can collaborate on your CMA.
The Valley saw, once again, a high demand for townhouses and apartments in August. The Benchmark Price for a townhouse as $491,900 in August, a one month increase of 1.0 per cent over July. For apartments, the BP was $349,300, a one month increase of 2.4 per cent over July. I have many clients wanting to find a quality attached residence in the Fraser Valley so again this month I have selected some areas with an affordable price range.
For townhouses, a price range that many young families are looking for is from the mid-$300,000s to about $500,000. Along with these Benchmark Prices (BP) I have also included the last month rate of increase so you can get a basic idea of the market activity there. For the least expensive townhouses you would have to go as far out as Mission where the BP in August was $392,500 with a 3.0 per cent last month rate of increase. For Abbotsford: $340,500 with 1.9 per cent last month increase. For Langley: $464,500 with a 0.7 per cent last month rate of increase. For North Delta, $501,000 with a 0.6 per cent last month rate of increase. As you can see, the BP rises as you get closer to Metro Vancouver.
For apartments, I know many young people are looking for a residence that is affordable within a starting salary range, so I’ve selected areas with a range of August Benchmark prices from the $200,000s to the mid-$300,000s. This time the least expensive is in Abbotsford at $259,800 with a 1.4 per cent last month rate of increase. Next in price is Mission at $273,200 with a last month rate of increase of 1.5 per cent. North Delta is $324,100 with a last month rate of increase at negative 0.4 per cent. North Surrey at $333,900 with a last month rate of increase at 3.0 per cent. And Surrey at $345,900 with a last month rate of increase at 0.4 per cent. You may have noticed the difference from townhouse prices here, as the least expensive apartments are not necessarily the farthest from Metro Vancouver.
image via biv.com
Thanks for reading!
Sibo Zhang, REALTOR®