Sales are down, listings are up, but the macroeconomic principle of supply and demand just isn’t having an effect on prices of homes in the Chilliwack and District Real Estate Board (CADREB) area.
April is typically a hot month for sales, but with just 280 sales last month, that’s down from 361 in April 2018.
The average selling price of $534,684 is close to the average of $533,020 for the same month last year.
And while 280 sounds low, that’s compared to the three-year selling boom from 2016 to 2018 that saw an average of 421 sales in April.
In 2015 there were 281 sales, in 2014 just 240 and in 2013 and 2012, 193 and 187 respectively.
As to the “why” sales continue to slump in 2019, CADREB blames the federal government’s “stress test,” which is living up to its name. The board estimates as much as 20 per cent of previously potential buyers are being shut out of the housing market because of the new mortgage qualification rules.
“Despite interest rates continuing to be historically low, the stress test, which was imposed in the new year has prevented many from achieving their dream of home ownership,” said Kyle Nason, CADREB president in a press release. “It’s proving to be frustrating to buyers and sellers.”
Nason said that the local board has now met with both the provincial and federal governments, asking for help for consumers to help offset the negative effects of the stress test. The test not only takes into account what a person can qualify for now in a mortgage payment, but what could be withstood in the event of a rate hike (currently based on 5.9 per cent).
While sales are down, listings are up 55 per cent from 989 in April 2018. The slowing sales has not put pressure on prices, however, with average sales prices up 3.4 per cent across the board. Chilliwack is down 3.15 per cent, but Sardis is up 5.1 per cent. The best bargains are in Hope, where the median price has decreased by 15.6 per cent.
Part of the reason why the average selling price is not going down with lagging sales is because what is being purchased is at the higher end. The highest number of sales last month (35) were in the $550,000 to $599,999 range followed by 26 sales in the $600,000 to $649,999 range.
Of the 280 sales, 140 were single family homes for an average price of $643,644. The 64 townhouses sold for an average price of $446,610. And the average of the 13 apartments sold was $259,204.
There were 13 sales over the $1 million mark, all houses with acreages for an average price of $1.24 million.