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Significant slump in housing market during November
The Abbotsford and Mission housing markets shrank last month as sales and new listings decreased in comparison to October, according to the latest statistics from the Fraser Valley Real Estate Board (FVREB).
November being a traditionally slow month, sales were down dramatically across the board in Abbotsford and Mission. Ten per cent fewer single detached Abbotsford homes were sold in Nov. 2013 than the month prior, 11 per cent fewer townhouses, and 53 per cent fewer condos.
The ones that did sell last month, however, sold faster than homes last year. Single detached houses that sold in Abbotsford in Nov. 2013 spent an average of 51 days on the market, two weeks less than homes sold in Nov. 2012. Townhouses spent 48 days on the market, 24 days less than last year. Condos were slightly slower to move.
The number of new listings in Abbotsford fell last month compared with Oct. 2013, dropping between 31 and 36 per cent for all residential properties.
In Mission, sales dropped by nearly a quarter from October to November 2013 for single detached homes, by two-thirds for townhouses, and one-third for condos. Single detached homes spent about the same time on the market as last year, while townhouses and condos were much slower to sell.
There were 32–83 per cent fewer new listings in November than in October for single detached homes, townhouses, and condominiums in Mission.
The decline in new listings during November, explained FVREB president Ron Todson, is normal because few people want to sell their homes during the holidays.
"December can be one of the best months of the year for buyers because if sellers have their home on the market during the holidays, it generally means they're serious about selling; there are fewer buyers to compete against; and home prices are generally at one of their lowest levels in the year. It really is a good time to buy," said Todson.
FVREB represents realtors in Abbotsford, Mission, Langley, Surrey, White Rock, and North Delta.
Townhouse and condo prices drop in Abbotsford
The average price of a new home in Abbotsford has declined nearly six per cent in the past year, the biggest drop in the Fraser Valley.
Breaking open the figures, the price of Abbotsford's single detached houses increased by two per cent in the last year, while townhouses fell by 11 per cent and condos by 17 per cent.
The Mission market remained comparatively steady in 2013, with the price of single detached houses and townhouses fluctuating only one per cent during the year. Condo prices fell by three per cent.
The reasons for the price declines are "complicated," explained Todson.
"It's a combination of inventory volumes, the age and quality of what's on the market at that given time – meaning older, more dated units will sell for less compared to brand new condos with hardwood and stainless steel appliances – and the impact of mortgage rule changes."
Todson added that with low interest rates and new mortgage rules last year that lowered the amortization for first-time buyers, single family detached homes became more affordable for people who previously considered townhouses and condos.
Investment into Abbotsford's commercial construction down
After climbing to a high point in September, non-residential building permits in Abbotsford dropped 80 per cent between Sept. 2013 and October, from $8.4 million to $1.7 million, according to the Vancouver Regional Construction Association (VRCA). The biggest crash was in commercial permits, which fell 89 per cent.
The VRCA expects total non-residential permits in 2013 to come in below 2012 figures.
Residential building permits fell by a less dramatic one-fifth in that time period, to $4.7 million.
Overall building permit values in Abbotsford declined 55 per cent in Oct. 2013. In the first ten months of 2013, $137.1 million worth of building permits were sold in Abbotsford, a 15 per cent decline from the same period in 2012.
Abbotsford is struggling more than the rest of the region. In the Lower Mainland-Southwest area, total building permit values rose 12 per cent between Sept. and Oct. 2013, to $613 million.