What are the numbers saying about the real estate market here in Surrey?
We’re currently looking at 5,565 homes listed on the MLS. In the last month, we saw 1,245 of them sell; those homes were then replaced by 2,245 new homes. That left us with 22% of all homes being sold.
If you compare this activity to the previous 30 days, when 29% of all homes sold, you can see that the sales-to-list ratio is beginning to drop. What does that tell us?
That tells us that the anticipated impact of the foreign buyer transfer tax is already starting to put gravity on prices. We’ve seen foreign buyers pull to the sidelines in many cases, and now a new phenomenon has been introduced into the market, of which we have yet to see the full impact of. What I’m referring to, of course, is the new mortgage qualification criteria that was introduced at the beginning of October.
This new criteria specifically affects first-time buyers. How? Prior to this legislation being enacted, a buyer who could previously qualify for a $700,000 mortgage can now only afford a $550,000 mortgage because their purchasing power has been reduced under the new five-year rule. As a result of this, the demand will likely decrease overall in the market.
Inventory is rising and demand is dropping.
With inventory rising and demand dropping, prices will likely also drop slightly. Fortunately, because we have good fundamentals supporting the conditions of the market, we can better accept the fact that the market has changed from where it was in the spring and summer.
If you or someone you know is planning to buy or sell property, I invite you to give me a call or send me an email. I look forward to helping you!
