Demand for detached homes puts the wack in Chilliwack, where buyers pay highest premiums in Lower Mainland
When Adam Major looked at homes sold last month in the Lower Mainland, the managing broker of Holywell Properties got blown away.
For clarity, the Lower Mainland includes all the markets served by the real estate boards of Greater Vancouver, Fraser Valley, and Chilliwack and District.
“It is a crazy real estate market, but the craziest market right now has to be Chilliwack,” Major told the Straight.
He noted that of the 180 sales of detached homes in Chilliwack and neighbouring areas in January 2021, 94 or 52 percent were above the asking price.
Moreover, the 180 sales were 106.9 percent more than the sales of freestanding homes in January 2020.
Compared to December 2020, the sales of detached homes in the Chilliwack area increased by 17.6 percent.
With this high demand, prices were surely to follow.
According to Major, the median price of a single-family home in the area rose to $741,350 in January 2021.
The increase represents a 15.4 percent increase from January 2020, and a 4.3 percent improvement over December 2020.
What’s more startling is that in January 2021, the top two homes bought at the biggest premium over asking price in all of the Lower Mainland were in Chilliwack.
One was 10075 Bonavista Street. It sold for $880,000, which was $231,000 above its asking price of $649,000.
This means that the three-bedroom, two-bath rancher with basement went 35.4 percent over its listed price.
According to B.C. Assessment, 10075 Bonavista Street has a 2021 value of $582,000 as of July 1, 2020.
Second on the list was 8415 Cessna Drive. It was listed for $569,900, and sold for $770,500.
This means that the three-bedroom, two-bath rancher went $200,600 or 35.2 percent above its asking price.
According to B.C. Assessment, 8415 Cessna Drive has a 2021 value of $518,000 as of July 1, 2020.
Completing the top five properties that sold with the biggest premium over asking price in the Lower Mainland are detached homes in Abbotsford and Port Coquitlam.
These transactions were tracked by Zealty.ca, the real-estate online information platform owned and operated by Holywell Properties.
The COVID-19 pandemic underpins a popular theory about strong demand for detached homes and bigger properties outside major urban centres like Vancouver.
The fashionable explanation is that people are fleeing crowded cities in order to have bigger spaces and protect themselves from the virus.
Tongue in cheek, Major is curious if this makes sense.
“I’m starting to wonder though if COVID doesn’t affect the limbic system – that part of the brain that regulates desire,” Major said.
Major was referring to the fact that the most number of COVID-19 cases in B.C. are in the areas covered by the Fraser Health Authority, which include the Chilliwack region.
Based on latest available numbers from the B.C. Centre for Disease Control, there are 41,503 reported cases in the health’s authority’s jurisdiction, which runs from Burnaby to the Fraser Canyon.
“Maybe the real estate market is crazy in the Fraser Valley, because the Fraser Valley has more COVID cases,” Major said.
“Think about it,” Major continued. “It’s kind of like a real estate zombie apocalypse where instead of wanting to eat brains, COVID makes you want to buy houses.”
Again, jokingly, the Holywell Properties executive wonders if Tiff Macklem, Governor of the Bank of Canada, “put something in their drinking water”.
“They don’t call it ‘the Wack’ for nothing!” Major said about Chilliwack.