December SFH median: the inventory overhang for high priced properties continues in Victoria.
.jpg "Modern House by pnwra from Flickr")
As of January 2, 2008, there were 160 single family homes valued at less than $536,000.00 for sale on the MLS in Greater Victoria. At the same time, there were 415 single family homes listed for sale with asking prices above the median price.
While the median reached an all-time high of $536,000 in December 2007, at the moment there are far more properties available above the median price than below.
The breakdown of single family home sales extrapolated from VREB stats for December 2007 is as follows:
$536 thousand or less = 93 sales.
At this rate, there are less than two months of sub median inventory currently available.
$536 thousand to $1 million = 80 sales
Since there were around 286 single family homes available in the median to 1 million dollar range, there are currently around 3 ½ months of inventory in this price range.
Over $1 million = 14 sales
With 129 single family homes for sale with asking prices above one million dollars as of January 2, 2008, there were around 9 months of million dollar plus inventory on hand in early January 2008, based on the December VREB stats.
So if we consider December a low watermark for inventory, the potential for sales over the one million dollar mark appears dim going forward.
Historically, January usually sees quite a few new listings, with an accompanying increase in sales. We will have to see if that does anything to dispel the tendency of Victoria buyers to prefer sub median priced homes at a rate that keeps the more affordable segment of the single family home market from building up.
So if your house is priced over $1 million, just like last month, the same message applies - be patient, it might only take 9 months to a year to sell your expensive, beautiful house, for that high price you believe you deserve.
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Greg, there is a realtor on Saltspring that calls this price compression. Here is an interesting link to his site.
It looks like Scott Simmons on Salt Spring expressed what is going on with the higher end of the market with the best analogy yet, comparing price compression to a slinky in action. Scott's clear explanation of the situation reminds me of stuff Mike Morgan was saying back in 2006 in Florida. Mike spelled out the magnitude of the situation when nobody wanted to hear about it. Well, except for Mish. But I guess Mike was right.
I hope people will respect Scott for explaining the situation here without the usual candy coating.
Now where is a Victoria realtor who is willing to do the same thing?
Hi Greg I think you hit the nail on the head with "the potential for sales over the one million dollar mark appears dim going forward." It is not an easy task to tell someone that the chances of a sale are slim to none. Nice blog you have here.
Thanks for the Kudos I was just trying to get my customers head around the ideal that they should not pre spend the million dollars they don't have.
Cheers Scott
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