June Real Estate Update
Hi everyone, I hope this message finds you and your families safe, healthy and in good spirits. I endeavour to bring you relevant market information, new listings, and the latest news which is shaping our local real estate market.
The conversation continues to circle around the COVID-19 pandemic although this month marks a more positive shift in local real estate activity. Our increased real estate activity for the month of May has coincided with the easing of restrictions.
From the last time this update reached you, a dismal April’s figures have increased significantly (which isn’t saying much). In April 2020, there were only 287 total sales in Greater Victoria and in May there were 457 sales. This figure constitutes a drop of 46.1% from May 2019. In similar fashion, less homes are coming to market as only 1,095 new properties were listed in May 2020 compared to 1,613 in May 2019.
Recently, there is more and more chatter about the trajectory of Canadian real estate in the wake of trends in global markets, rising unemployment, and the economic weight that will follow. The CEO of the CMHC released a statement predicting Canadian home prices to decline by between 9-18% in the next 12 months. I have linked that article for you below. As bullish as this forecast appears, it would be irresponsible not to acknowledge that this being disseminated from one of the agencies that has shaped mortgages and home prices in Canada for years. This price retraction may well be the reality in other Canadian markets given the looming deferral cliff and nearly half of our workforce (8.5 million Canadians) that applied for the CERB.
It’s also important to acknowledge that headlines like these shape the perspectives of what buyers and sellers are expecting when buying or selling in Victoria. Nevertheless, the crux on home price action in Victoria will always lie within the equilibrium between supply and demand.
At the end of May, we are still hovering at historically low inventory figures for this time of year with only 2,544 active listings in Greater Victoria. I expected there to be more properties listed this month than the reality presented and thus far our prices have remained stable as a consequence of lack of supply.
On a few occasions, I have experienced some pent-up demand for unique homes in attractive locations firsthand. I listed a property in South Oak Bay this month and was able to help my clients sell the property above the listed price. In some ways this speaks to buyer confidence in our market and lack of inventory, but also that attractively priced homes, well presented, will always garner interest.
As stable as Single Family Home prices have been to this point, the gap in condo sales to active listings (110 sales, 831 active) stretched to 7.5 months of inventory for May 2020 and I would expect some downward pressure on condo prices if this trend continues. The median price of a condo in May was $390,000 (the lowest it has been in over 1 year). I will continue to track the relationship between sales and active listings as the weeks unfold.
For those that are currently participating in the market, our industry has adopted new business practices and is emphasizing the use of technology in order to showcase properties as safely as possible. Listings can include video property tours and 3D tours and we are using health disclosures, social distancing, and disinfecting/sanitary procedures to help limit the risks associated with property visits.
If you would like to hear me speak on the current environment, be sure to watch the video above!