Local real estate market has entered ‘balanced’ territory
Local real estate sales continue to decline.
While it is common to see declining sales in January, sales in January 2019 dropped almost 24 per cent (23.7 per cent) when compared to January 2018, with sales of single family homes down almost 30 per cent from January 2018.
“It’s already an interesting year for local real estate,” said Cheryl Woolley, president of the Victoria Real Estate Board (VREB). “[Realtors]are are keeping busy showing homes and writing offers, however actual sales are slower than we would expect in an average January.”
She said buyers are hesitant to purchase for many reasons. “For instance, changes to mortgage lending rules have decreased the amount of funds buyers can qualify for by up to twenty-five per cent,” she said in citing a familiar reason. “In turn, some consumers are re-evaluating their expectations and looking at condos and townhomes rather than single family homes; or they are looking at single family homes further outside the core.”
Many would-be buyers and sellers are also holding out. Buyers are waiting for new inventory to open up, while sellers are assessing their prospects.
While the number of listings has steadily risen, prices remain steady, if not rising slightly.
“Over the past few years, demand in Greater Victoria has outstripped supply, putting upward pressure on pricing,” said Woolley. “While many of the new developments proposed for our region are being built for much needed rental and social housing units, it will provide little relief for buyers who are caught in the pinch between tougher lending rules and higher prices.”
Looking at the ratio between sales and active listings, it has hit 20 per cent — the upper end of what constitutes a “balanced market” in which prices face little pressure either way.
Looking at specific communities, Saanich has seen prices for single family homes drop. In Saanich East, prices dropped to $864,400 in January 2019 from $875,000 from December 2018. Six months ago, the price for a single family home stood at $911,700.
In Saanich West, prices dropped to $750,000 in January 2019 from $753,000 in December 2018. Six months ago, the price stood at $763,700.
Depending on the neighbourhood, January prices for single family homes in Victoria ranged from $656,300 to $742,000, with the general trendline pointing downwards.
Prices for single-family homes also dropped in most but not all West Shore communities and in communities on the Saanich Peninsula.