New(er) Home Resale Report: July 2024

As we enter the "dog days of summer," you might feel the days dragging on. Your social media feeds are filled with people at the lake or traveling abroad, while you’ve either just returned from vacation or are about to embark on one yourself. It’s a time when many people take a step back to recharge, preparing to dive back into the autumn routine of work, school and daily responsibilities.

Coupled with ongoing restrictive interest rate policies, it's unsurprising that the new(er) home market remained subdued in July, with total sales down 8% over the month and 34% compared to the same period last year. Most markets are currently experiencing buyer's market conditions, offering opportunities for those looking to secure a great deal in today’s quieter environment.

The New(er) Resale Report focuses on housing types most likely to attract first-time buyers, young families and investors – groups that remain most impacted by today’s high interest rates. Millennial and late-stage Gen Y buyers are entering their prime household formation years, creating strong tailwinds that will inevitably drive demand back into the market. It's not a question of if, but when.

The Bank of Canada’s recent back-to-back 0.25% rate cuts in June and July, lowering rates to 4.5%, offer some relief for those hit hardest by high rates. While a 0.5% reduction may not make a big impact on its own, the overall trend is likely to draw buyers back into the market.

With three rate meetings remaining in 2024, buyers should stay vigilant and capitalize on the favorable conditions. Whether in the resale or presale market, there are great opportunities available, making this an opportune time to buy.

Entry-level townhomes saw an unexpected increase.

Townhome sales in July 2024 saw an unexpected 23% increase over the month, driven by significant gains in Surrey and Westside Vancouver, where sales surged by 250% and 150%, respectively. Additionally, a 9% rise in active listings has kept the new(er) townhome market favorable for buyers across most tracked markets. Only Willoughby, Langley and North Vancouver out of the nine markets monitored currently favor sellers.

While sales were down 37% compared to the same period last year, it's important to note that median sale prices have risen across most markets during this time.

For those seeking more affordable townhome options, the Fraser Valley markets remain appealing. Surrey, South Surrey and Willoughby offer inventory with median list prices of $950,000 or below, which is nearly $250,000 less than Coquitlam, the most affordable market north of the Fraser.

One-bedroom condos saw a modest increase.

Sales in July 2024 saw a modest 5% increase over the month but were down 21% compared to the same period last year.

Notably, the most affordable markets in both the North and South of Fraser regions were the only ones to see a sales increase over the month, with Willoughby, Langley, Surrey City Centre and Coquitlam experiencing significant gains of 29%, 36% and 82%, respectively.

This trend will be important to watch, especially since these are the three most active markets for new presale development opportunities. It could be particularly favorable for presale projects in Willoughby and Coquitlam, where the newer one-bedroom resale market is currently in a strong sellers' market, with sales-to-active listings ratios of 30 and 33%, respectively. Given these conditions, I’m giving both markets a green light for presale investment.

Two-bedroom condos remained sluggish.

The newer two-bedroom condo market remained sluggish in July 2024, with sales down 21% from the previous month and 42% versus the same period last year.

North Vancouver and East Vancouver were the only areas to see increased activity over the month, with sales rising sharply by 31% and 27%, respectively. This uptick is due to a limited supply of new townhomes, leading many buyers to opt for condos as a more spacious alternative. The price gap between newer two-bedroom condos and townhomes in these markets is nearly $500,000.

Downtown Vancouver continues to face challenges, with only two newer homes sold in July. It remains a strong buyer’s market, with a sales-to-active listings ratio of just 2%. With a median list price of $1,499,000, this market may remain difficult for some time.

Single-family homes continue to lag.

Sales of entry-level single-family homes continue to lag, experiencing a 24% decline over the month and a 35% decrease year-over-year.

With median list prices starting at $1,749,000 in Surrey and reaching up to $4,298,000 in Westside Vancouver, the entry point remains out of reach for most buyers across the region. Apart from Coquitlam, Richmond and North Vancouver, which have some of the lowest selections of newer entry-level homes, all other markets are firmly in buyer’s market territory.

Interest rates will remain a crucial factor for those considering newer entry-level homes, especially for young families who are significantly affected by these rates and their impact on affordability. This pressure is likely to drive increased demand for newer townhomes, which are increasingly becoming the preferred alternative to single-family homes for this generation.

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.