It's Official. Your Home is Worth $466,000 Less

Home prices across the Fraser Valley continue to fall.The benchmark price of a detached home has now dropped to approximately $1.3 million, down more than $460,000 from the peak of roughly $1.76 million in March 2022.That's an enormous adjustment.Sales also remain near historic lows, buyers continue to be hesitant, and we're still firmly in a buyer's market across much of the Fraser Valley.But buried underneath those numbers are a few trends that are beginning to look more encouraging.New listings are slowing. Active inventory is starting to come down. Sales are improving in certain areas. And for buyers who have been waiting for affordability to improve, prices are now substantially lower than they were just a few years ago.I'm certainly not calling the bottom of the market.But for the first time in a while, there are at least a few positive signs worth watching.

Fraser Valley Detached Prices Are Down More Than $460,000

Let's start with the biggest number.At the peak of the market in March 2022, the benchmark price for a detached home across the Fraser Valley was approximately $1.76 million.Today, we're around $1.3 million.That's a decline of more than $460,000.In percentage terms, detached home prices are currently down approximately 8.8% from last year.Townhouses have held up somewhat better, declining approximately 6.2%, while apartments are down approximately 9.3%.Those are significant declines.But they also mean buyers today are looking at dramatically different purchase prices than buyers faced during the peak of the market.

Buyers Still Aren't Rushing Back

You might think falling prices would cause buyers to flood back into the market.So far, that hasn't happened.Sales fell another approximately 2% month over month and are down roughly 4% compared with the same period last year.Year to date, we haven't even reached 9,000 sales across the Fraser Valley Real Estate Board.That's approximately 5.5% below the same period last year.The significance of that is difficult to overstate because last year was already one of the slowest real estate markets we've experienced in roughly 25 years.Unless something changes dramatically before the end of the year, we're on pace for another historically slow year for transactions.But sales are only one side of the equation.And the other side is starting to get more interesting.

Fewer Sellers Are Coming to Market

This may be the most encouraging statistic in the latest numbers.New listings are declining faster than sales.That's important.A buyer's market is ultimately created when the supply of homes available for sale exceeds the demand from buyers.We've had extremely weak demand for a long time.But if fewer homeowners decide to list their properties, inventory eventually begins to decline as well.And that's what we're starting to see.This doesn't mean we're suddenly heading back into a seller's market.We're nowhere close to that.But if new listings continue falling faster than sales, the imbalance between buyers and sellers should eventually begin to narrow.That could be one of the first ingredients necessary for prices to eventually stabilize.

Inventory Is Still High

We aren't there yet.Active inventory remains approximately 31% above the 10-year historical average.However, I think that number needs some context.The previous decade includes some of the most unusual real estate markets we've ever experienced.We had the extremely strong markets of 2016 and 2017.Then we had the pandemic-era market of 2020 through early 2022, when inventory became incredibly scarce and buyers competed aggressively for almost anything available.Comparing today's inventory with that period makes the current market look even more extreme.And there's no question buyers have significantly more choice today.

Less Than One in 10 Listings Is Selling Each Month

One of my favourite ways to understand the market is to look at how much of the available inventory is actually being purchased.Currently, we're around a 9% consumption rate.In simple terms, fewer than one out of every 10 homes available for sale is selling in a given month.Compare that with early 2022.At that time, properties could sell almost immediately after hitting the market. Buyers had very little time to think, multiple offers were common, and missing one property could mean watching the next comparable home sell for even more.Today, the experience is completely different.A buyer can look at several properties.They can compare them.They can negotiate.They can conduct proper due diligence.And if they miss one property, there's a good chance another comparable option will still be available.That's obviously challenging for sellers.But from a buyer's perspective, it's a much healthier environment in which to make a major financial decision.

South Surrey and White Rock Are Showing Some Strength

The market isn't equally weak everywhere.One of the brighter spots in the latest numbers is South Surrey and White Rock.Detached home sales increased approximately 46% compared with the same period last year, rising from 41 sales to 60.Townhouse sales were even stronger.There were approximately 29 townhouse sales during the comparable period last year versus 47 this year—an increase of roughly 62%.That doesn't mean prices are suddenly taking off in South Surrey and White Rock.But increasing transaction volume is worth watching.If we're looking for early indications of improving market conditions, areas where buyers are beginning to transact more frequently are a good place to start.

What's Happening in Surrey?

Surrey continues to show many of the same challenges as the broader Fraser Valley.Detached benchmark prices are down approximately 8.3% from last year.The average detached price is down even more, approximately 10.3%.However, this is also a good example of why I generally prefer the benchmark price when evaluating market direction.The average detached price actually increased by almost 3% in the most recent month.That doesn't necessarily mean detached homes suddenly became 3% more valuable.Average prices can move significantly depending on the mix of properties that happened to sell during a particular month.Benchmark prices attempt to account for those differences and provide a better indication of what's happening to the value of a typical home.The encouraging part is that Surrey detached sales increased both from the previous month and compared with the same period last year.Again, that's something worth watching.

Surrey Townhouses Are Holding Up Better

Townhouse prices across Surrey are down approximately 6.6% from last year and declined by almost another 1% during the most recent month.That's obviously still a decline.But when we compare property types over the longer term, townhouses have generally held their value better than both detached homes and condos.That makes sense to me.Townhouses occupy an important middle ground in our market.They're more affordable than detached homes while still offering many buyers additional bedrooms, outdoor space and the ability to accommodate a family.With detached homes remaining expensive even after substantial price declines, townhouses continue to fill an important affordability gap.

Surrey Condos Continue to Struggle

Apartments are having a more difficult time.Surrey apartment sales are down approximately 22% compared with last year.Prices are also down around 10%.There was, however, a very small month-over-month increase in apartment prices from August into September.I wouldn't read too much into a single month, but when you're looking for signs that a declining market may eventually begin stabilizing, those small changes are worth monitoring.More importantly, condo owners shouldn't necessarily look at falling condo prices in isolation.If you're planning to move into a townhouse or detached home, what matters is the price difference between what you're selling and what you're buying.And that's where this market can create some interesting opportunities.

Detached Homes Have Lost Roughly Five Years of Price Growth

When we index prices and look back over the longer term, the size of the correction becomes even clearer.Fraser Valley detached home prices are now approximately where they were in March 2021.In other words, roughly five years of detached price appreciation has effectively disappeared.Townhouses and condos have held up somewhat better.Their benchmark values are closer to levels last seen around October 2021.That's still a major correction, but it demonstrates that different property types haven't moved exactly the same way.And that matters enormously if you're considering moving from one property type to another.

This Could Be a Very Interesting Market for Move-Up Buyers

Falling prices aren't automatically bad news for every homeowner.Imagine you own a condo and eventually want to purchase a townhouse.If your condo falls by $50,000 but the townhouse you want falls by $100,000, you're actually $50,000 closer to making that move, ignoring transaction costs and financing differences.The same principle applies to someone moving from a townhouse into a detached home.This is why I constantly tell clients not to focus exclusively on what their current property is worth.If you're selling and buying in the same market, you need to look at both sides of the transaction.For some homeowners, particularly those moving into a more expensive property, a declining market can actually create an opportunity.

Buyers Have Something They Haven't Had in Years: Time

There's another major positive for buyers that doesn't appear directly in the price statistics.Time.During the strongest years of the market, buyers often had hours—not days—to make decisions involving hundreds of thousands or even millions of dollars.Today, buyers can usually take their time.They can look at multiple homes.They can compare neighbourhoods.They can review strata documents.They can complete inspections.They can negotiate on price.And in many cases, they can walk away from a property knowing there will probably be another option available.That's a very different buying environment.

Sellers Need to Adjust to the Market We Actually Have

For sellers, the current market requires a different strategy.When fewer than one in 10 available listings is selling each month, simply putting a property on MLS and waiting isn't enough.Pricing matters enormously.Presentation matters.Marketing matters.And sellers need to pay attention to what buyers are telling them through showing activity—or the lack of it.The market doesn't particularly care what your neighbour sold for two years ago.It cares about the competition buyers can choose from today.In a declining market, chasing yesterday's price can become expensive.

Are We Finally Getting Closer to Balance?

I wouldn't say we're there yet.Sales remain historically weak.Inventory remains elevated.Prices are still falling.And most areas of the Fraser Valley remain firmly in buyer's-market territory.But there are a few encouraging signs.New listings are declining faster than sales.Active inventory is beginning to come down.Detached sales have improved in Surrey.South Surrey and White Rock are showing significant year-over-year increases in detached and townhouse transactions.And buyers are finally benefiting from substantially lower prices and significantly more negotiating power.None of those things individually means we've reached the bottom.But they're exactly the types of trends I'll be watching for signs that the market is beginning to stabilize.

A Difficult Market Can Still Create Opportunities

It's easy to look at a $460,000 decline in the detached benchmark price and conclude that everything about this market is negative.It isn't.For homeowners who purchased near the peak and need to sell today, the decline can obviously be painful.But for first-time buyers, prices are substantially lower.For move-up buyers, the gap to a more expensive property may have narrowed.For buyers generally, there is more selection, less competition and more negotiating power than we've seen in years.And for sellers, fewer new listings coming onto the market could eventually begin reducing some of the competition they're currently facing.The Fraser Valley real estate market hasn't turned around yet.But underneath some very difficult headline numbers, we're finally seeing a few trends moving in a more encouraging direction.And those are the numbers I'll be watching most closely over the coming months.

Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty