New(er) Home Resale Report: August 2024

I recently read an article about a survey indicating that homeownership remains a top priority for Millennials and Gen Z, just as it has been for previous generations. As a realtor specializing in Metro Vancouver’s new condo and townhome market, my recent interactions with prospective buyers reflect this as well – young professionals are seeking to enter the local housing market with the goal of progressing up the property ladder over the long term.

The security and comfort that homeownership offers come from the stability of having a place to call your own, having control over your living environment and building long-term equity. However, the goal of homeownership has been put on hold for many in recent years. The market has been a rollercoaster since 2020, impacted by COVID-19, historically low interest rates that fueled rapid house price growth, rising inflation and now 20-year high interest rates, making monthly payments more unaffordable than ever.

Now, with interest rates having seen three consecutive decreases and more cuts anticipated, it's only a matter of time before the market begins to recover. Pent-up demand from a generation entering their prime household formation years is expected to drive this change soon. Despite two rate cuts in June and July, August sales were tepid, falling 23% from the previous month and 33% compared to the same period last year. The third cut in September, combined with people returning to their regular routines after summer, is expected to bring a more active fall market.

For buyers who have been contemplating a purchase and waiting for the “right time,” the current selection of inventory, buyer's market conditions found throughout the region and falling interest rates make now the most opportune time to take action.

Entry-level townhomes remain subdued.

Entry-level (1,200 – 1,600 sq. ft.) townhome sales remained subdued in August, with just 36 total units sold. At the end of the month, there were 337 active listings, resulting in a sales-to-active ratio of 11%, firmly placing the market in favor of buyers.

Newer median townhome sale prices in August ranged from $820,000 in Surrey to $1,355,000 in North Vancouver.

The highest median list price is in Westside Vancouver, at $1,884,000. However, only two sales were recorded in the area in August, with a median sale price of $1,284,000. This represents the largest gap between buyers' and sellers' expectations.

Nearly 60% of the available townhome inventory is located in Surrey, South Surrey and Langley, providing young families with the most choices and affordable options in the region.

One-bedroom condos struggled.

With first-time buyers and investors remaining sidelined due to high interest rates, one-bedroom condo sales struggled in August. Only 82 units were sold, resulting in a 10% sales-to-active listings ratio, keeping the market firmly in favor of buyers.

Newer one-bed condo sale prices in August ranged from $460,000 in Surrey City Centre to $735,000 in Downtown Vancouver.

Nearly 25% of available one-bedroom condos are in Burnaby. With a region-low sales-to-active listings ratio of 9%, it's an ideal time for potential buyers to negotiate on prices.

South Surrey and Langley were the only two seller's markets in August, a trend that has remained relatively constant over the past year. The extremely low supply of one-bedroom condos in these two markets presents a prime opportunity for presale buyers in the Fraser Valley. Both markets continue to draw young buyers and renters from Metro Vancouver with their affordability and growing neighborhood appeal.

Two-bedroom condos are still seeing weak demand.

The two-bedroom condo market continues to favor buyers with a sales-to-active listing ratio of 9%. Sales in August decreased by 19% compared to the previous month and were down 43% compared to August 2023.

In August, prices for newer two-bedroom condos ranged from $630,000 in Surrey City Centre to as high as $1,725,000 in Downtown Vancouver.

There were a total 1,061 active listings at the end of August, with Burnaby comprising nearly 30% of total available inventory.

Similar to the one-bedroom market, the two-bedroom market continues to face weak demand, as high interest rates remain a barrier for first-time buyers and those looking to upsize for more space.

Single-family homes didn’t have much momentum.

There were just 18 total newer single-family homes sold in August 2024, a 31% decrease from July and 14% decline compared to the same period last year. With 275 active listings as of the end of the month, the single-family market continues to strongly favor buyers across the region with a sales-to-active listings ratio of 7%.

In August, prices for newer single-family homes ranged from $1,465,000 in Surrey to as high as $3,920,000 in Westside Vancouver.

The newer single-family market continues to struggle for momentum as interest rates keep buyers at bay. Even with rates expected to decline over the fall, high prices will remain a barrier for most buyers, increasing demand pressure on the local townhome market.

Reasons why you should consider newer-home resale data:

• Facilitates wise choices in new pre-sale purchases by providing valuable comparables, offering insights into product considerations for both personal use and investment.
• Great for those looking to purchase housing that is still in the early stages of its lifecycle – this means less repairs & maintenance during the first few years of ownership.
• More recent building and developer history – provides assurance and certainty when making one of the most important transactions of your life.
• Homes include some of the latest design and technology – great for resale value.
• Monthly sales statistics crucial for evaluating and planning new housing developments.
• These figures are routinely used by industry stakeholders such as real estate developers to understand the value of land, and anticipated market values for newly completed homes.

Read the full Dexter Realty report by Manraj Dosanjh.