New, stricter mortgage rules in place as of Jan. 1 may have cooled the local market slightly, but with the fewest numbers of listings in a decade, prices continue to rise and the Chilliwack and District Real Estate Board (CADREB) area remains a seller’s market.
Those homes that are being snapped up are increasingly on the higher end pointing to more and more buyers rolling into town from west of here.
“We continue to see an influx of interested buyers from Greater Vancouver and surrounding areas,” CADREB president Greg Nord-Leth said.
“A million dollars is a lot of money, but that may only buy you an older home in the Metro area in need of renovation, but it buys a luxury home here. There is little hope of buying more than a small condo in Vancouver for $500,000, but that could buy you a home with a yard in the Eastern Fraser Valley.”
Of the 184 homes sold in the CADREB region in January 2018 – which includes Chilliwack, Agassiz, Harrison, Hope to Boston Bar – the average price was $477,586, that’s up 10.5 per cent from $432,042, the average price of the 182 homes sold in January 2017.
(See photos below for three examples of listings on Realtor.ca as of Feb. 8.)
That compares to the average sale price of $464,897 for all of 2017, up 16.8 per cent from 2016, which was similar to the 18.4 per cent increase in 2016 versus 2015.
What real estate in Chilliwack in 2018 will look like is the subject of some speculation with various factors. The hotter markets to the west in the Fraser Valley and Metro Vancouver are causing a serious spike in demand here, which, coupled with the shortage of listings, is pushing prices up.
“While no doubt the newly tightened mortgage qualifications played a role, the lack of inventory remains a concern locally,” Nord-Leth said in a CADREB press release. “Realtors report that it is becoming increasingly difficult to find properties that meet their client’s wish list.”
Adding uncertainty to the market is what impact the new mortgage “stress test” might have. It means qualifying for a mortgage is a little tougher as it’s based not only on what a potential home buyer can afford now, but what they would be able to afford if the interest rate rise.
There were 91 single-family homes purchased last month compared to 88 in January 2017. On first blush, that might show the mortgage rules are not having an impact. On the other hand, it could mean the new rules are impacting people who might have otherwise bought elsewhere in the Lower Mainland but instead are looking to Chilliwack for its relative affordability.
Of the 184 homes that sold in January, the highest number (25) sold in the $450,000 to $499,999 range. That was followed by 18 sales in the $550,000 to $599,999 range, and 17 at the $600,000 to $649,999 level.
There were two sales of homes over the $1 million mark, with one of them topping $1.5 million.
Anecdotally, realtors say many homes are currently selling above asking prices.
At about two thirds of where realtors would like this number to be, there were just 663 active listings at the end of January down even from the low number of 747 a year ago.
“It’s the lowest number of listings in more than a decade,” Nord-Leth said. “It remains very much a seller’s market.”