This year is on pace to be the hottest ever for real estate in Chilliwack and across B.C., but things may cool down in 2022.
After six months of sales, the B.C. Real Estate Association (BCREA) forecasts 4,600 home sales in the Chilliwack and District Real Estate Board (CADREB) area, which would be a 31.6 per cent increase over the 3,496 sales in 2020.
There were 2,927 homes sold over the first seven months of the year, a pace that would top 5,000 if it continued all year.
The third quarter forecast issued this month by BCREA predicts sales to drop by 17.4 per cent to 3,800 for 2022.
“The pace of home sales in the province has slowed in recent months but an unprecedented start to the year still has B.C. on track for a record-breaking year,” according to a BCREA press release.
A somewhat unexpected second-half slowdown arrived, which BCREA says is prompted by eroding affordability and a tightening of mortgage qualification rules.
“However, with the B.C. economy on track for very strong growth this year and next, along with the eventual return of normal migration flows, home sales are anticipated to remain well above long-run average levels into 2022.”
Even with sales moderating slightly in the second half of this year, the BCREA forecasts home sales in 2021 across B.C. will set a new record of 118,350 units before slowing to 100,150 units in 2022.
As for home prices, the average selling price in 2020 in the CADREB area was $577,201, a 10.3 per cent increase over 2019. The average selling price for 2021 is forecast to be $698,000, up 20.9 per cent, a price expected to rise to $716,400 in 2022.
The average price of a home sold in Chilliwack in July 2021 was $722,000, while the average price of a home sold in January was $632,495.
To compare, the average selling price in the next door Fraser Valley Real Estate Board (Abbotsford to White Rock) is expected to top $1 million in 2022, in Greater Vancouver that’s $1.2 million, and for all of B.C., $937,300.
BCREA says that with strong demand being supported by low mortgage rates and a rapidly rebounding post-COVID economy, the more significant concern is whether there will be an adequate supply of listings in the market. While listings hit all-time lows in Chilliwack and other markets in some months this year, the supply situation is even more severe in markets outside the Lower Mainland, where new listings activity has been lacklustre.
“Even if sales come back down to long-run average levels, total listings would need to nearly double to bring markets back into balance,” according to the BCREA. “Prices are under significant upward pressure due to extremely tight market conditions, while buyer preferences are still tilted toward extra space and larger homes. As a result, the average price in 2021 is on track to post a second consecutive year of double digit gains. We are forecasting the provincial average price to rise 16.6 per cent to $911,300 this year, followed by a 2.9 per cent gain next year to $937,300.”
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