Home sales in Langley are down by about half compared to last year, as higher interest rates continue to slam the brakes on the exuberant real estate market that has dominated since mid-2020.
In August, 66 detached houses, 68 townhouses, and 64 apartments changed hands in Langley, according to monthly statistics released by the Fraser Valley Real Estate Board (FVREB).
Compared to the same month last year, that means the sale of houses dropped 47.2 per cent, townhouses were down 50.7 per cent, and condos plunged by 60.2 per cent.
Last August, B.C. was in the midst of a staggering boom in housing sales – and prices – that finally peaked around March of this year.
But even compared to the pre-pandemic market, sales this past August were a little anemic. For comparison, in August 2019, Langley saw 88 houses, 79 townhouses, and 65 condos sell.
Prices, which shot up dramatically over the past two years, continued to decline.
The FVREB recently revamped how it calculates the “benchmark” price for homes. The benchmark is the average price for a “typical” home in each housing category.
While the benchmark prices were on the decline, they are still higher than a year ago. The benchmark price of a single family home in Langley is currently $1.62 million, compared to $1.48 million in August 2021.
However, median and average prices have now dropped considerably more.
The median price of a single family home in Langley hit $1.31 million in August, down 5.9 per cent from the $1.4 million in July, and down 1.3 per cent from $1.33 million a year before.
Townhouses and condos saw a similar pattern.
The median price of a townhouse in Langley in August was $790,00, down 4.2 per cent from July, but still 5.3 per cent higher than the same month a year before.
The median condo price was $554,7350, 11 per cent higher than August 2021, and 0.9 per cent higher than the $550,000 asking price in July.
Langley realtor Rosemary Papp isn’t worried that the market will grind to a halt. As a realtor who has been in the business more than 40 years – and started during the wild boom and bust of the early 1980s, when interest rates hit 22 per cent – she said some people will always need to buy and sell homes.
Although the market as a whole is seeing some major swings, Papp specializes in seniors-specific communities, which are limited in number.
Some buyers, including her core customers, have already paid off their mortgages years ago and aren’t worried much about what the market is doing.
“For them, it doesn’t matter,” Papp said.
However, the boom and bust will come as a surprise to some realtors, she said.
“Anybody who came in in the last five years has had a free ride,” she said. “Maybe the last 10 years.”
The Bank of Canada has been raising interest rates sharply since the start of the year, in an attempt to curb high inflation.
Another significant hike is expected on Sept. 7, which would make the cost of a mortgage even more expensive. If the Bank of Canada raises rates 75 basis points as expected, it will continue to erode buying power for potential homebuyers.
The average mortgage rate before Sept. 7 was just over five per cent.
Across the FVREB’s region, the average residential price peaked at about $1.9 million early this year. Since then it has plunged down to under $1.5 million, although that is still about a third higher than it was before the pandemic.
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