The residential real estate market in the Fraser Valley is heading into the key spring selling season. The market dynamics will determine price direction for 2023, I believe. What will be the primary determining factor, in my view, will be new and active listings.

Historically low levels of active listings have perhaps kept prices from falling further than they have. With limited homes for sale, lower demand due to higher mortgage rates, is keeping things in balance mostly. The sales to active listings ratios seem to indicate a balanced market.

What needs to be monitored will be how many potential sellers actually move ahead with listing their homes for sale. It doesn't necessarily have to be distressed sellers. It could be sellers who held off on listing their homes during or due to the COVID 19 pandemic.

I will update regular readers here as updated statistics come available. But if interest rates stabilize and listings remain limited, then maybe the downside in prices will be too. To be determined...

A nice high level overview of recent and current market conditions across the British Columbia (B.C.) housing market, in the video below.  The Chief Economist for the British Columbia Real Estate Association raises some interesting stats.

I believe there are two especially interesting themes worth considering. First, inventory levels of active listings are just starting to return to pre-pandemic levels. Low selection of active listings had led to fierce competition for homes during the pandemic. If more listings come online and provide a more healthy supply of homes for sale, then that should ease demand pressures we've seen for a few years now.  Secondly, rising interest rates in 2022 led to a slowdown of sales and is reflected in a sales-to-active listings ratio that indicates a balanced market right now.

The key to the 2023 housing market and prices in Metro Vancouver and the Fraser Valley will be how many homes get listed for sale during the spring market that is coming quickly.  If a healthy supply of homes get listed, then there might be more easing in prices. If not, then maybe a floor on price declines gets set sooner than many might expect.