The B.C. Real Estate Association (BCREA) has Chilliwack’s real estate market struggling compared to other areas of southwest B.C., and that’s expected to continue into 2024. The organization released its second quarter forecast, projecting an 11.7 per cent dip in the average value of single family homes for the rest of this year, setting in at $900,900. That will be followed by a modest 2.7 per cent bounce back next year, up to $925,000.
The BCREA looked at the Chilliwack and District Real Estate Board (CADREB), which covers an area from Yarrow to Lytton including Agassiz, Harrison, Chilliwack and Hope. CADREB was compared with the Fraser Valley Real Estate Board (North Delta, Surrey, White Rock, Langley, Abbotsford, and Mission) and the Real Estate Board of Greater Vancouver and didn’t fare well.
The BCREA foresees condominium AVs in the CADREB region dropping by 3.7 per cent to $390,300 between now and December, followed by a 4.1 per cent rebound to $406,300 in 2024.
The BCREA predicts townhouse AVs dropping 11.5 per cent to $576,000 in 2023 before bouncing back by 3.8 per cent in 2024, settling in at $598,000.
“Honestly, looking at the stats, I think our Q1 for 2024 will be stronger than anticipated unless there is some sort of economic turn-down again,” CADREB president Brad Latham countered. “I personally think the Q1 for 2024 will be somewhat like we are in now, but not as slow of a January, and then a steady market from there on out.”
Interest rates have played an out-sized role in the real estate market cooling, and Latham said there have been whispers of the United States boosting theirs again. Whether Canada follows suit is anyone’s guess.
“Common talk around the water cooler was no more increased mortgage rates with the potential for our first decrease (at the) end of 2023 or the beginning of 2024,” Latham suggested.
Unit sales are expected to rise this year, but not at the same rate as elsewhere.
Sales of single family detached homes in the CADREB region are projected to rise by 11.1 per cent, from 2,700 this year to 3,000 next year. By comparison, the Fraser Valley is anticipating a 23.1 per cent gain and Greater Vancouver is looking at an 18.1 per cent increase.
Comparisons are similar with townhouses and condos. CADREB condo sales are projected to rise 5.9 per cent in 2024 compared to 19.5 per cent in the Fraser Valley and 12.9 per cent in Greater Vancouver. CADREB townhouse sales are projected to rise 18.7 per cent compared to 32.5 per cent in the Fraser Valley and 31.9 per cent in Greater Vancouver.
Housing starts may be at the root of pessimistic projections.
The BCREA predicts a decline in Chilliwack housing starts across the board in 2024, minus 16.7 per cent for single family homes, minus 14.3 per cent for condos and minus 18.2 per cent for townhouses. By comparison, the Fraser Valley Real Estate Board is expected to see a jump of 11.5 per cent for single-family homes, 12.5 per cent for condos and 11.1 per cent for townhouses.
Latham said the City of Chilliwack first quarter building permits are down from last year. Builders were not anxious to move ahead in a decreasing market fueled by increased lending rates. He said Chilliwack’s population and geography also play a role.
“Why we are behind the Fraser Valley and Vancouver is because we have fewer homes to sell and people are shy to list right now because of the fear of being homeless, so it’s a bit of a double-edged sword,” Latham commented. “The reality is they (Fraser Valley/Greater Van) have more people so therefore more need for homes. Even if their sellers are shy to list they will see more activity based on sheer population.
“As for newer construction, we are a farming community surrounded by ALR so it’s just tougher for us to find a proper building development site unless we are blasting away on mountainsides, which is costly and time-consuming.”
The BCREA publishes a housing forecast twice a year. For more info visit https://www.bcrea.bc.ca/