If you’ve been thinking of brushing up on your strata fundamentals, you’re overdue! Our MLS® data confirms that the ratio of sales of detached homes compared to strata has flipped in only five years.
Our infograph shows that in 2015, sales of single-family detached homes (RED HOUSE) represented 60 per cent of Fraser Valley’s main residential market. The combined sales of townhomes (REA TWNHS) and apartments (REA APT) picked up 40 per cent.
In comparison to year-to-date sales for 2019, that ratio has now reversed. Combined sales of attached homes now garner 60.4 per cent of our market and detached, 39.6 per cent.
Fraser Valley REALTORS® have been watching the shift towards multi-family housing units for many years now, as has BCREA’s Economics department. In one of their Bulletins from 2015, BCREA’s Deputy Chief Economist, Brendon Ogmundson, cites numerous factors driving the trend. “A myriad of factors impact housing demand, from geography and land scarcity, to population growth and economic conditions.
“The geographical limitations of being fenced in by the North Shore Mountains, the Strait of Georgia, the border with the United States and the Agricultural Land Reserve in the Fraser Valley, have necessitated a shift in the housing stock toward higher density projects. Indeed, single-detached homes are becoming increasingly scarce.”
The other main reason behind the shift is affordability. Since the introduction of the federal government’s mortgage stress test January of last year, the typical borrower now qualifies for about 18 to 20 per cent less than they used to. Taking a typical detached home in the Fraser Valley as an example, instead of being able to afford a home that costs $964,600 (the benchmark price in April), they can now only afford a home that costs a little over $735,000.
For buyers, the only option is to save more money or consider buying a smaller or less expensive home. According to Brendon Ogmundson, it means the trend towards attached is here to stay. In a recent one-on-one Q & A with FVREB, he said, “Given the rapidly growing population of the Fraser Valley, we anticipate a push for increased density as land supply becomes even more constrained.
“That means that attached housing will become an increasingly important part of the Fraser Valley market and we expect that its share of sales will continue to grow.”
In seeing and crunching the data, BCREA President and FVREB Broker, Michael Trites, says, “Our members are now selling one and a half times more attached then detached and many of these buyers are first-time buyers. In response to what’s happening in the marketplace, we need to emphasize education on strata properties in our profession.
“Strata-titled transactions are far more complex than selling a single-family home. All REALTORS® must have the ability to protect their clients and mitigate their own risk.”
Trites says BCREA is asking its member associations to promote and strongly recommend their members take BCREA’s existing courses, Strata Fundamentals – Part 1 and Part 2. The next Strata Fundamentals – Part One (PDP) coming up at FVREB is on Friday, June 28 from 9 am to 3 pm. Part Two (PDP) is slated for Friday, July 12. To register for one or both, head to the FVREB TLC Calendar.