Crews build the new Midtown development

Crews build the new Midtown development

Chilliwack real estate sales cooling as prices continue to rise

BCREA forecasts sales numbers to fall for 2017; CADREB says demand is still strong and that's forcing prices up

Chilliwack’s record real estate sales numbers in 2016 are not likely to continue this year.

Prices, on the other hand, are only heading up.

That’s the prediction from the B.C. Real Estate Association’s (BCREA) housing forecast update.

Last year, there were 4,306 sales in the Chilliwack and District Real Estate Board (CADREB) area, up 37.2 per cent over 2015, itself a solid year.

The average sale price of a home locally was $397,911 up 18.4 per cent over 2015. Provincewide the average sale price in 2016 was $691,144 up 8.8 per cent over 2015.

And while the BCREA predicts sales in CADREB in 2017 to drop 21 per cent to 3,400 and a further 8.8 per cent to 3,100 in 2018, prices are forecast to rise 4.5 per cent to $416,000 to 2017.

For 2018, the forecast is a further 2.9 per cent to $428,000.

Modest increases in price to be sure, but highest out of the 11 real estate boards in the province. B.C.-wide the BCREA says prices will drop 4.9 per cent.

Two months in, the forecasts are looking accurate as CADREB sales numbers show the average home sold last month was $421,545, a 21 per cent increase over the average of $347,466 in February 2016. In January, the average price was $432,043 up 38 per cent from $312,424 a year earlier.

“[M]arket conditions will continue to be tilted in favour of home sellers in many regions, while home builders scramble to complete existing projects,” the BCREA says.

CADREB is quite a small market, so the statistics are skewed by the comparatively large Fraser Valley and Greater Vancouver boards, which make up more than half of real estate transactions in B.C.

In the Fraser Valley board, which includes Abbotsford to Surrey, the average prices is forecast to drop from $676,946 in 2016 to $657,000 this year, and sales are predicted to drop from 23,086 in 2016 to 19,700 this year.

Those numbers parallel the provincewide prediction of a 14.1 per cent sales drop.

At least part of the reason sales may drop in Chilliwack is construction and new listings are not keeping up with demand. This is also why prices are forecast to continue to rise. At the end of February there were just 787 active listings, down from 1,021 a year ago.

Two months into 2017 and the forecast drop in sales numbers is evident. There were 217 homes sold last month down from 283 in February 2016. In January, sales were up slightly to 182 from 178 a year earlier. So far in 2017 that’s a 13.4 per cent sales decrease in sales, compared to the BCREA forecast for the year of a 18.4 per cent drop.

The 217 homes sold last month is 18 per cent higher than the 10-year average for February, but is in line with the pre-recession numbers when 218 homes were sold in February 2008.

New CADREB president Greg Nord-Leth said that sales may be down, but the numbers were still strong given higher prices, low inventory and the worst weather for decades.

“With baby boomers looking to our area for retirement and more affordable housing for millennial families, we expect the housing market in Chilliwack to continue to be in a strong market for the foreseeable future,” Nord-Leth said in a press release.

Of the 217 sales, the highest number sold (49) were in the $400,000 to $499,999 range, followed by 40 sales in the $500,000 to $599,999 range. Two properties sold over the $1 million dollar mark. There were seven sales of houses with acreage.

paul.henderson@theprogress.com

@PeeJayAitch