Let me start with a disclosure that this isn’t about the whole "New Year New Me", that we typically see on the fifth day of January. This is about the whole new market that we may be coming into for 2018 and need to watch for.
The year was 2015, the month was December and we started to notice our market was changing, some said for the better, some the worse. One thing we all knew was that it would be a rough road with no idea on full recovery. We spent most of 2016 looking forward to the end of the year to bring us a new faith in what was once the strongest second fastest growing economies in British Columbia. In the West, only to be ranked with places like Fort McMurray for growth and housing price increases. What happened, what changed that gave our market a new humble feeling of uncertainty and question?
When I look back, 2017 should have been our recovery year, the year we all celebrated as a savings grace in Fort St John. Why wasn't it? What happened in 2017 needed to happen for overall strength and growth for 2018, 2019 and 2020. As with many provinces and countries across the country, we had an election during what should have been our mid recovery. We witnessed the long time controlling Liberals be replaced after sixteen years with the NDP who had not been in power for a very long time. Now this post isn't about politics, this post is about our market. So as the world waited to see what this massive change would bring ... so did our market.
In December the NDP became the fourth Governing body to approve The Site C, one of the most controversial projects in the history of the province. Right or wrong, isn't for me or you to say.. What was right was a decision was made and it alone made history. Some people were waiting for the yes to increase business, or home prices, or recovery. Others were waiting for job security or for making a move to the North Peace. Whatever the reasons behind the personal reason to celebrate or mourn, wasn’t the question, the question was what’s next.
The NDP's commitment to continuing and finishing Site C brought our market optimism, not for today, but for tomorrow and the next day. It showed investors that the Government is ready to make hard decisions for the next four years and gave some balance to an unknown new market.
What does this mean for us, what does this mean for our market and our homes? Statistically speaking our market has decreased 13.5% over the two years. If your home was valued at 435,000 when you purchased it in 2014/2015, the same home is now valued at $375,000 today. This seems like a lot, but keep in mind, how small it is compared to what other markets dropped during this market change, or that of 2009.
So do we celebrate the fact it’s a New Year, new market yet? We certainly do, we are going into what is our third year since the market started to change. Here are the signs we have witnessed thus far:
Sales in 2017 were up 112 transactions over 2016, listings are the lowest they have been since this all started. New construction has all but stopped; large residential development seems to be just a memory for most of us. We currently have 8 months of inventory on the market under a de-seasonalized sales period.
Here is what to watch for in the coming months and year:
-Pressure on existing stock due to first time buyers taking advantage of these prices, knowing they will not get another chance. (Yes this means you!)
-New announcements coming this spring and summer for extended resource development in the region.
-New constructions starting in the late summer or early fall, as an indication of the change in the market.
-Existing housing shortage spring 2019 due to market recovery and no new homes available yet.
I know, that’s all great but what are the facts, what is the market going to do. Based on the facts, the markets, and the trends, I would estimate a 4-6% increase in home values for 2018. This will not return us to 2015 sales numbers, but certainly gets us on the way. These numbers could easily increase depending on the signs to watch for that I mentioned above, but this gives you an idea of what is coming next. Going further out, I suspect an 8-10% increase in 2019, not only returning us to pre 2016 days, but also adding extra value in the homes in this area.
So the short answer to all of this is, was yes ... #2018 is a time celebrate and embrace getting back to what we know and what our market does best. Happy New Year!