Real Estate Market Update - My Take

We’ve heard the statistics - Sales are up, Inventory is down and prices are on the rise. 
The question many have is what does that mean for me and will they stay up or will the bubble burst? If that’s you, then stick around for my take on the 2021 Real Estate Market in Abbotsford BC. 
I was able to participate last week in a BCREA Webinar that was titled

Economic Recovery and a Bright Outlook for 2021

Overall the webinar was very positive about the BC economy and Brendon gave 5 reasons for being so positive. I won’t go into the details but if you are interested, click this link to the replay of the webinar. 
What I found particularly interesting is their forecast on interest rates and inflation. 
It is not unusual to find 5 year fixed rates at below 1.9 % and I have had at least one client tell me they negotiated a rate of 1.65 %. That is almost free and to use a word we likely wore out in 2020 it is unprecedented! 
What was key to this discussion was the forecast that rates are likely to stay low until at least 2023. The low-interest rates definitely will play a part in the continuation of our real estate market. 
Another question comes up about inflation. Since the Covid Pandemic, the bank of Canada has engaged in a practice known as Quantitative Easing. Which is essentially them buying longer-term securities and thereby increasing the money supply. I’m not an economist so I don’t really understand how it all works but the effect of the QE, as it is called and other steps won’t impact our inflation rate like you might think and it is expected to be in the range of about 2%. 

The five reasons for the bright outlook in 2021 are

  1. Vaccines are available and with proper management, we should be able to bend the curve by March and April
  2. They anticipate a Consumption boom which will be good for the retail sector.
    1. They estimate there are about 75 billion dollars of excess savings that could be unleashed in 2021.
  3. There is a positive outlook regarding trade with our global partners as well as an aggressive immigration policy by the federal government which could see 60,000 persons immigrate to BC each year for the next 3 years.
  4. Major projects in the province will Ramp back up and
  5. Interest rates will be low. 

So my take on all this is we are going to have a very active and challenging year in the Real Estate industry. 
Inventory is low and needs to increase to take up the pent up demand. Prices are projected to go up on average 8% in British Columbia as a whole but that is going to vary depending on your neighbourhood. 
Listings So far this year in the Fraser Valley Real Estate Board are up overall about 30% from January last year so that is good sign.Demand still seems to be incredible as it is almost double from the same time in 2020. And we have seen some crazy things happen. 
Like houses selling for $50 $100 and even $160 thousand over the list price and this might continue until the market sorts itself out. New listings getting 65 showings in 2 days. And I’m sure your friendly neighbourhood realtor could tell you a few more. But 
If you are planning to make a move in 2021, it’s really important to get accurate information and advice so you can make the right move for you and your family. If I can help you do that in I am happy to oblige. I’m Don Goertz with RE/MAX Little Oak Realty and I’m here to help you.