Christmas is coming! A Look Back at 2022.
2022 WRAPPED - REAL ESTATE
Here we are nearing the end of 2022. What an interesting year this has been all around. We began the year with a crazy market hot off the heels of 2021. By the end of 2021, we were in a place of fast-paced sales, buyers completing purchases with little protection, and we saw record-high home values. This only lasted until about February though as we began to see dramatic changes. The winds shifted us from a Seller's market to a Buyer's market by springtime.
What triggered this shift was a rise in purchasing interest rates, rising caution on affordability, worldwide affairs, and a growing rate of inflation here in Canada affecting every-day living. For the average family, this became a tough market to break into and hold steady. We saw a large decrease in home sales and consequently, prices dropped. This was the song and dance for the majority of the year as we learned how to grapple with a whole new extreme.
As we progress through December we are able to show data suggesting average days on market for a home sale has increased from about 5 days to 40 days. This is compared to roughly January 2022. Not only that, but we can see house prices have hit a whole new level.
JANUARY 2022 AVERAGE HOME PRICES IN CHILLIWACK
$1,098,710 - Detached home
$725,138 - Townhome
$410,959 - Apartment
DECEMBER 2022 AVERAGE HOME PRICES IN CHILLIWACK
$861,009 - Detached home
$542,832 - Townhome
$337,342 - Apartment
What a difference. Now some food for thought here. It is probably safe to say that house values grew somewhat artificially over the course of the pandemic era. How would one ever REALLY know though how far a push will go? Whether it's up or down - it's a tough thing to see ahead. There have been MANY driving factors for these recent markets; someone could be forgiven for not keeping up with every single thing.
My general advice as always is to do what best suits YOU. If you are in a position to buy a home and you can make the payments, then do it. Your family needs a place to grow and you deserve some peace of mind of your own. Don't worry about what everyone else is doing.
GOING FORWARD - 2023 AND BEYOND
What happens next? We will see if history repeats itself. If you go back to the 80s and follow the trends, you will see every time rates hit a new high they eventually plateau. As soon as you hear about the rates DROPPING, trends would suggest the drop will continue for about 2 years at that point. Ultimately, the interest rate after 2 years of dropping will represent about half of the rate just before the drop. This model can be seen if you follow along the market trends over the years. It is probably safe to say the trend will continue, but we don't know exactly when the rates will begin to drop.
BIG CHANGES IN THE INDUSTRY
There have been some major announcements and changes coming to the house buying process. Firstly, and you've probably heard all about it by now, the Strata Property Act was amended recently. The changes mean STRATA PROPERTIES can no longer allow rental restrictions. This was done in order to curb our supply and demand issues here in BC. We are experiencing a housing crisis and those in power believe this will be a good way to help assist with that. Secondly, age-restricted STRATA PROPERTIES are no longer permitted, EXCEPT for 55+ communities. These changes really open up the strata markets to everybody.
Starting in the new year there will also be a home-buyer recission period. What is this exactly? This is a period where you can back out of a contract of purchase and sale to a property at the cost of a small percentage of what the deposit would have been on it. Why is this being done? During last year's crazy market we saw many homebuyers frantic and at a loss when trying to buy a home. It was a mad rush on boxing day morning. This led to many buyers having to opt out of certain standard provisions in the purchasing process. Of course this was the only way to secure a home at the time in that hectic market. This new recission period on resale homes allows a buyer time to perform due diligence or back out of a deal to purchase a property. More information to follow!
In short, it has been a wild year. We have been riding the waves of last year back down to a calm level where people can stop and breathe when it comes to buying and selling homes. This is not a bad thing necessarily. As for mortgage payments, you'll find even though the rates are higher then they were - mortgage payments are similar to what they would've been if purchasing the same home at an increased value at the start of the year. 2023 will be eventful I am sure and I look forward to embracing it with open arms as that is all we can do. Keep in touch with me to stay on top of the latest real estate news and changes.
As always, just do what makes the most sense for you!
Merry Christmas and have a Happy New Year!
Zach Biro, The Family Realtor
Fraser Valley, BC, Canada
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