FEDERAL MEASURES MAKE IMPACT ON VICTORIA REAL ESTATE MARKET

Ron’s candid thoughts on today’s market in Victoria Last month I wrote commenting on the Victoria Real Estate Board News Release saying that in my opinion gives a sugar coated outlook of reality. I also said that it’s not all doom and gloom, that it’s an excellent time to buy, especially to trade up! This month is a repeat! The first sentence of the VREB report claims that “prices held steady” which is simply untrue. We are commonly seeing sales reported in some cases substantially below their tax assessed values and recent independent appraised values. We are seeing properties sell for less than they were purchased for in the last few years. We are in a Buyer’s market with a substantial oversupply relative to buyer’s activity. Last month’s ratio of sold to listings shows now a 13 month inventory. Prices have come down, period. Due in part to the continuing hangover from the global monetary crisis of 2007, confusion over HST, economic woes and most recently and significantly, continued measures to tighten lending practices. It has gotten much more difficult to borrow money for all including first time buyers, refinancing homeowners, investors, builders and especially high end. There is certainly resistance from those who do not have to sell, but those in distress who have to sell are being forced to accept less than they, or we, imagined. There is an increasing flow of foreclosure forced sales as declining prices have eroded the equity and left many in a position where they are unable to get enough on sale to clear their obligations. We’ve even successfully completed a “short sale” in which we were able to negotiate on our client’s behalf with one of our national banks to accept the sale for much less than the outstanding mortgage and release our client from any obligation to the shortfall. We are now “Victoria’s Short Sale Specialists”! Personally I think most of the correction has already taken place and that it is an opportune time to buy for those who are in the position to do so. Our underlying economy is strong and when the HST issue is soon history and consumer confidence starts to recover prices will too. If you wait for the market to reach bottom you won’t know it did until it’s already on the way back up! Warren Buffett said in February that if it was practical he’d buy a couple hundred thousand homes in the US. For a personal consultation of your options in today’s market please call today! Ro November 1, 2012 VICTORIA, BC—While prices held steady through most of the Greater Victoria region’s real estate market in October, government lending regulations have had the desired “cooling effect” on year-over-year sales numbers.Total MLS® sales for October 2012 were 373 compared to 483 in October 2011. During the month, 211 single family homes sold throughout the Victoria Real Estate Board’s region, compared to 260 in October 2011. The average price for single family homes was $576,720, down 2% from last October’s average of $590,539. The median price for the same period is down $24,000 (4.5%).  Month-over-month, both sales volume and the six-month average for single family homes are flat. Active listings are 4,876. “Overall sales for Greater Victoria are down 19%,” says Carol Crabb, President of the Victoria Real Estate Board. “Federal measures to slow real estate sales nationally are having a local affect. Our REALTORS® tell me that with the reduced amortization rates, many buyers are having trouble getting financing for the type of home that fits their needs, particularly first-time buyers.”Crabb also notes that there are fluctuations across the region. Sales and prices are flat in the Core Municipalities, while sales are down on the Saanich Peninsula, with declined sales and prices on the Westshore. “I strongly caution against reading too much into the numbers,” she says. “Both activity and prices vary by sub-area. For some the sample size is always small, so a sale of one or two properties can result in a 50% change.” There were 92 condominium sales last month, 37% fewer than during October 2011. Six manufactured homes sold compared to 10 during the previous October. Townhome sales declined 37% and the average price dropped from $428,040 to $387,769, a 9% decrease.  Total Waterfront Single Family Dwellings sold:                     15, up 3 from 2011 Total Non-waterfront Single Family Dwellings sold:              196, down 52 sales from September 2011 Single Family Dwellings sold over $1 million:                        11 (1 over $2 million, 1 over $3 million)