Balanced-Buyers Market in March

The Victoria Real Estate Board statistics for March are out!


The sale/listing ratio is 41.4%. When this number is at 50%, it means we are in a balanced market. A balanced market is when the supply of homes equals the demand for home. The above stats show we are leaning slightly towards a buyer’s market, where there are more listings than sales and therefore a greater supply. Overall this would have a slight downward pressure on prices.

So why is it that some homes sell quickly and for above asking price? Every area in Victoria and the Capital Region is different. For example, there are some places where the supply of homes is very low and there is a pent up demand of buyers waiting for listings to come up in that area. As soon as a listing hits the market (and is priced reasonably), people jump at the opportunity to own the home.

If you are interested in moving to a certain area of town and are worried you will miss an opportunity, please fill out my buyer request form here and I can set up an automated search that will send you notification when a new property hits the market that matches your criteria.

October Market Slice

Here is my most recent newsletter (in Blog-form). To see what it really looks likes, check out the most recent edition here.
If you would like a copy sent to your inbox every other month, sign up here!

It’s that time again! Welcome to the newest edition of Market Slice, a piece of real estate delivered to your inbox every other month.

National: The Bank of Canada rose its rate, however the five year conventional mortgage rate (or “posted rate”) is still very low at 5.39%. There are discounted rates available as low as 3.45% for a five year fixed rate mortgage. There is some confusion over the Federal Government lending rules so I just want to clarify some points. First, you can still get high-ratio financing with as little as 5% down. Second, if you are getting a five year fixed rate mortgage, you only have to qualify at the discounted rate (3.45) instead of the bank rate. When in doubt, ask your mortgage broker or I can refer you to one.

Provincial: The HST referendum has caused some uncertainty in the new housing market. To reiterate, HST only affects new housing and not re-sale homes.

Local: The market in Victoria since August has been very slow. Sellers are being forced to lower their prices while buyers have been taking their time with purchases, chasing the low prices down. The prices will not continue to go down forever. I believe we’re reaching a tipping point where sellers are going to take their homes off the market and wait to sell or rent instead. As listings become restricted the prices will level off. The market in Victoria is cyclical in that prices move up and down but over the long run, they will continue to go up (so long as we stay the most temperate city in Canada!). If you are planning to move, find a home you’ll be happy in for at least 5-10 years and don’t panic when prices drop slightly.

Riding the roller coaster

I love how the media has a way with words “some agents are having to take on second jobs to make ends meet amid declining sales”.

Well let’s do the math. There are 1330 agents in Victoria and only 395 sales in September (that’s 790 ends) therefore many realtors did not have a single sale last month.

A good portion of the public doesn't realize this: Realtors work in a commission based industry. We do not make any money if we do not make a sale. Also, we do not get a salary from our brokerage! In fact, we pay an arm and a leg to be a part of a brokerage. We pay to have an office, colour copies, parking, coffee, sale fees, listing fees, board fees… and then we pay a percentage of our commissions as well. It`s a very expensive industry to work in so it`s no surprise to me agents are taking on a second job or getting out of the market completely.

When the market slows down, it can be stressful. Listings we thought were going to sell 2 months ago are still on the market. When the homes eventually do sell, we do not get paid until completion. There is a lot of uncertainty about where your next pay cheque will come from and how much of it has already been accounted for by the long list of expenses. That`s why it`s important to have three months of income in the bank at any given time.

These slow times don`t last forever though because markets are cyclical. There is always going to be ups and downs. The lack of sales from August and September means there`s a lot of buyers out there waiting to buy. I feel like there is pent up demand in Victoria and in October and November we`ll see an increase in sales again. As an agent, it`s important to become an expert at riding the real estate roller coaster.

Gearing up for Real Estate Season

In the past couple weeks I’ve noticed a real change in the real estate energy in Victoria. People are buzzing about the approaching “real estate season” with the promise of many more listings this spring.

As of today, we have 2715 listings on the Victoria MLS system. At the end of January 2009 there were 3678 listings! So unless 963 new listings appear on the market in the next 6 days, we’re certainly low on inventory. What does this mean for buyers and sellers?

Right now we’re experiencing an interesting market. During 2009 consumers were quite nervous about moving because of the uncertain times ahead. At the same time, buyers were gearing up to purchase properties because interest rates are the lowest they’ve been in a very long time. So we’re left with a low inventory and a pent up demand of buyers. (Reminds me of a lesson from my first year micro economics class!) Low supply + high demand = increase in prices. We’re seeing an upward pressure on home prices (great for selling).

Buyers, on the other hand, are competing for the few listings which are available. Come spring, there will be many more choices and we should return to a balanced market. Interest rates are expected to stay low until the 4th quarter, so the cost of getting a mortgage will remain low.

The point I’m trying to make is, why wait until the spring to list your home? If you list, for example, in February and your home is priced right, you’re guaranteed to sell it. If you’re nervous about not finding the right type of property to move in to, you can set the completion date for April to give yourself lots of time to find the right place. Make sense?

Ahem, insert shameless self promotion

If you would like to know how much your home is worth, I do free market evaluations! Give me a call (250-384-7663) or send me an e-mail!

If you are interested in receiving monthly Victoria market updates, please click here to subscribe to my market news.




Notice how low the amount of listing are in the above graph!



In this graph the grey bars represent the listings while the blue squares represent the sales. In December, the amount of new listings almost equals the amount of sales! To date, this January there are 925 new listings and only 267 sales.