December 2023 - Sunshine Coast Real Estate Outlook.

Detached homes on the Sunshine Coast, BC, still prove to be out of reach for most people in terms of affordability and/or qualifying at current benchmark prices. This has translated into total detached home sales being down 20-30% in the past couple of months, respectively, and a slow trickle of median home prices decreasing by 3-4% each month.

No surprise, but townhomes and condos have been leading the market in terms of price increases, with a much lower number of total sales, and a large decrease in days on the market. The sales-to-active-listing ratio was 11% for attached homes in October, almost double that of detached homes.

Total MLS inventory sneaked back under 500 listings for sale on the Sunshine Coast this past week, still a far cry from the well over 900 listings we saw at the height of the last prolonged buyer's market that lasted roughly from 2010-2015. However, I feel we will see a surge of inventory this coming spring as people opt out of expensive mortgage renewals in favour of switching back to renting and/or reallocating the equity in their homes to different housing options.

Looking forward, I feel the trend of housing prices over the next couple of years will somewhat mimic the 2012-2015 period:

Long-term fixed interest rates continue to decline with bond yields going down. All signs are pointing to a BOC rate hold for the December 6th announcement and potential rate drops as early as March next year, given that inflation is still trending slightly downward.

With rates and prices both on the decline, once we hit the point where monthly mortgage payment affordability/qualifications intersect with the median detached home prices, we should expect to see demand for detached homes increase substantially again, although not to the same extent we saw in 2020.

My prediction is that we'll see more of a balanced market by this coming spring, with a fair bit more demand, bottom-of-the-market prices, and some great buying opportunities. Depending on where mortgage rates go over the next year will depend on if we continue to bounce at the current spot in the market or if things start to take back off again. The Sunshine Coast median prices are still an attractive price point for people from off the coast, given we are still 15-20% below most other areas in Greater Vancouver.

The big question for buyers: buy now or wait to see what the market does and risk the potential crowds returning when rates/prices hit a low enough point. Should they not, you may get yourself a better deal on a property, but if you look at historical data and you're not looking to buy and flip, then holding onto real estate for 5 years or more has always proven to be a good bet.  The real decision should be based on your budget and housing needs or investment strategy, rather than trying to time the smaller dips in the market. If you're selling to buy, then the difference will be negligible.

Sellers, be prepared to be competitively priced, spend longer on the market, and be ready to entertain lowball offers. But, if you're priced well from the start, you should be in good shape to avoid the latter of the two.  If you’ve purchased in the past 3 years, you’re likely looking at a bit of a loss, so best to hold on for another 1-2 years and keep paying down that mortgage.  If you bought previous to 2020, you should still be in good shape to get out with some profit!

If you're interested in chatting about the market, or thinking of buying or selling in the next year,  please don't hesitate to reach out!