Fewer sales may not mean lower prices in the Chilliwack real estate area.
The B.C. Real Estate Association (BCREA) released its second quarter forecast Tuesday (May 31).
After 4,799 units sold in 2021, a decline was almost certain to happen. But the BCREA suggests a substantial dip is coming, projecting sales to drop by 27.1 per cent in 2022 (down to 3,500 units) and a further 17.1 per cent in 2023 (down to 2,900 units).
The BCREA breaks the province down into 11 real estate regions.
Chilliwack and District, which includes an area from Yarrow to Hope including Agassiz and Harrison, is predicted to see the second steepest drop in unit sales, trailing only the Fraser Valley at 30.3 per cent.
Part of that has to do with rising interest rates.
“After a strong first quarter, B.C. markets are now adjusting to a much different interest rate environment,” said BCREA Chief Economist Brendon Ogmundson. “With mortgage rates surpassing four per cent for the first time in over a decade, the housing market over the next two years may have very little resemblance to the housing market of the past year.”
A slowdown in housing starts also plays a role.
The BCREA suggests there will be 10.4 per cent fewer single and multiple family housing starts in Chilliwack in 2022, compared to 2021, falling from 1,362 to 1,220. The drop from 2022 to 2023 is expected to be even stepper, an 18 per cent fall from 1,220 to 1,000.
Less to sell equals less sales, and that’s been the case for much of the last few years. But it’s also the reason prices remain high, and are projected to get higher.
Demand is still there, and continued low inventory means people are motivated to snap up what is available.
The MLS average price for a single family home is expected to jump another 14.7 per cent this year, rising from $923,998 in 2021 to $1,060,000 in 2022.
The average price of a townhouse is expected to hit $720,000 this year, up 21.2 per cent from $594,015 in 2021. Apartments are projected to see the biggest price increase of all, jumping 23 per cent from $353,618 in 2021 to $435,000 in 2022.
The average price of all residential sales in Chilliwack and area is predicted to jump 16.4 per cent in 2022, fifth highest behind the Okanagan (22.1 per cent), Vancouver Island (19 per cent), Kamloops and District (18.8 per cent) and Victoria (17.8 per cent).