Analysis of March 2008 VREB numbers + MOI table
Well, some interesting tid-bits from the March VREB numbers. For one thing, if you subtract 12 million dollar waterfront listings from the monthly sales totals, what would the average price in Victoria be for a single family home? Around $566,000. An astronomical sum, to be sure, if not playing with paper equity and two mortgage helpers as "money" -- but less than the official average of $597,176, which represented a modest rebound from the February average of $587,295, and stemmed a 3 month decline in the average price of single family homes.
The single family home median was much lower than the average, and lower than the previous month's median - clocking in at $529,625, compared to $543,500 the month before. This is essentially unchanged from January 2008, when it was $530,200, and December 2007, when it was $536,000.
What does all this mean? Take a look at the table showing months of inventory based on a search of the VREB area of the MLS done April 2, 2008.
There has been a big jump in townhouse inventory since the last time I did a comparable search. Interestingly, the sub median inventory has also jumped quite a bit. Also, while below the median price, the market for single family homes is a definite seller's market, it is important to note that this comprises only a quarter of the single family home inventory listed for sale at this point in time. Above the median, it is a far more balanced market. Put another way, 1 in 4 sellers can expect a quick deal. For the other 3 (above median), expect to wait at least 3-4 months.
In the monthly summary of the March 2008 stats, VREB President Tony Joe said: "...sellers can anticipate strong interest in properties that are realistically priced." Translation: your home is probably not worth quite as much as you think. Realtors can't sell unrealistically priced properties quickly, can they?
In the case of townhomes and condos, the situation is not as good for sellers - there are just too many properties on the market to absorb quickly, relative to recent and/or projected sales - and this does not even take into account multi unit properties that will soon be completed and added to the pool of inventory.
Just a note about the months of inventory (MOI) table: it seems that projected sales used to compute a 3 month average in part based on 2007 numbers may turn out to be overly optimistic.
In the first quarter of 2008 approximately 1544 combined units (condos, townhouses and single family homes) have sold so far. In 2007 and 2006 the numbers were 1734 and 1716, respectively, so there appears to be a weakening of demand.
How will the MSM spin these numbers? Should we care? Is this a touchdown for the bears? Let me know what you think about the current situation.
Oh by the way, due to the 100% increase in million dollar + property listings from the previous month (from 10 to 20 sold, what a difference a month makes), there are now only 13.15 months of mega priced inventory on the market. However, the total number of such listings continues to grow, proving not all sellers are prepared to listen to the advice of Tony Joe:
"...sellers can anticipate strong interest in properties that are realistically priced."
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Hi there - I'm a Vancouver-based reader and enjoy your blog. Great content and I have always figured Victoria would show weakness signs before Vancouver.
Just a small point: could you add a left margin to your stylesheet? It's hard to read the content when it's tight up against the left-side of the browser.
Thanks for the service you provide.
Anecdotally, I think people are definitely coming around to the bearish view on the condo market. The numbers are confirming intuition that locals just don't want to spend 300-400K to net one bedroom in an itty bitty condo. And this swarm of out of town buyers just isn't materializing.
I really wish city council had a bit more foresight here. Most of us want to see downtown revived into something better than it is now, but the local incomes, the population numbers and the prevailing desire for houses just won't be able to support all those condos about to come to market over the next 2 years (don't even get me started on the Bayview luxury condo concept).
It's a total pipe dream, but I would have liked to see the start of a carfree downtown core, starting with parts of Government st. Add to that mixed low-rise development of houses and apartment units in the core and we could remake downtown into something much more desirable than the car exhaust filled, bum-ridden place it is.
Condo sales are still going strong in Abbotsford and I think Vancouver is doing good as well. Condos are the only type of housing thats still affordable.
The Fraser valley is toast. http://langley-financial-planning.blogspot.com
If condos sales are so strong in Abby why did the Brio get cancelled? Condos aren't affordable at all, they are horribley overpriced and tiny with huge strata fees and no parking. They will be the first to crash and crash the hardest. Take a look at Miami's condo market.
The BRIO is the one and only project that was cancelled. What about dozens of other project that sold out and successfully completed? Of course the real estate market can not continue to grow at 15% a year but does that mean we will see a "Miami style" crash. Lot of people who failed to invest in real estate when real estate was relatively cheaper 3-5 years ago are hoping for a crash. Even if it slows down as some "experts" are saying, a condo that sells for $200,000 is not going to be worth $100,000 overnight. Our mortgage markets are also stable...... . .. Sooo I don't see a crash coming to Abby anytime soon. :)