An attractive entry point?
Sales in August were still 15% lower than August 2023, even though fixed mortgage rates are about 1.5% lower than last year. Prices are slightly lower than they were 12 months ago.
The sales-to-active listings ratio sits at 12%, teetering on the edge of a buyer's market. A balanced market typically has a ratio between 12% and 20%. We haven’t seen conditions this close to a buyer's market since the spring of 2020. A higher volume of new listings is contributing to the balance, whereas in past years, available listings remained tight.
Improving Affordability for Buyers
One of the most significant changes in recent months is the improvement in mortgage affordability. Buyers can now secure 5-year fixed mortgage rates in the mid-4% range, a notable decrease from the nearly 6% rates we saw last year. With prices remaining flat or slightly down since then, this shift has created better buying opportunities.
Looking Ahead: 2025 Forecasts
The BC Real Estate Association (BCREA) has forecasted a modest 1-5% price increase for 2025, depending on the city. These forecasts are as good as a dart throw, but given current market conditions this projection seems reasonable. A key driver of the continued supply of new listings could be investors facing negative cash flow and upcoming debt renewals, even with the lower mortgage rates. I anticipate that this trend will carry on into next year and keep price growth from getting out of hand. With inflation seemingly under control and rates forecasted to drop further, it seems mortgage rates might finally be consistently dropping.
Why Now Might Be the Time to Buy or Upsize
In my opinion, the next four months could present a good entry point for buyers or those looking to upsize. With mortgage rates down, your monthly payments will not only be lower, but a larger portion will go towards paying off your principal instead of interest. Prices are still at the same level as when rates were higher, so you're getting more value for your money. Additionally, with most homes sitting on the market for 10-60 days, there's ample time for due diligence and subject-to-sale offers—opportunities that aren't always available in a hotter market.
The current selection of listings is the best we’ve seen in the last five years. This gives you the chance to find a home that has been well-maintained, at reasonable completion date terms from sellers.
So far this September we’re seeing an encouraging increase in buyer calls and offers being written, suggesting renewed interest. We’ll see if this carries through the fall and winter, or if it’s just a seasonal bump as buyers return from summer vacation.
Featured Listing
Below is 14458 Marine Drive, a waterfront property in White Rock we have listed for just under $3m. This is a perfect property for someone looking to build their dream home, or buy as a holding property. They aren’t making more waterfront land! View the listing here.
Kleine Real Estate Team
Sutton West Coast Realty