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Ron’s Victoria Real Estate Update Report for November 1, 2013

Posted by Ron Neal on Friday, November 1st, 2013 at 3:20pm.

You don’t have to look very far to see media reports predicting real estate bubbles bursting and other doom and gloom, that’s how they sell their news in turn enabling the sale of advertising and generating revenue. They HAVE to make it as attention getting as they can! Extremely the other way, in my view the real estate boards, Canadian Real Estate Association, CMHC and other public bodies sugar coat the truth often, mostly out of responsible and realistic concern that if they told you what they really think it would lead to mass panic, whether prices were seen to be on the rise or on the fall. You don’t see any of them ever predict a decline in prices and they even seem reluctant to talk about drops that have already clearly occurred! Last month for example our Victoria Real Estate Board reported that we had 512 sales, up 37.3% from 373 last years very slow sales. Listings are also down to 4322 from over 5,000 a year ago and there’s no question that it’s way more positive today than a year ago. There is still approximately an overall 8 month supply on MLS. Still a buyer’s market and trending towards balanced. From my observations, the bubble already burst in Victoria quite some time ago, led by the high end immediately after the global financial crisis and most recently the mortgage tightening hitting the low end and middle of the market. While the rest of Canada may be in for a shock, our prices are already corrected and buyers are gaining more and more confidence to buy again. The leading indicator of whether prices will rise or fall is consumer confidence. Ours has been improving since we said goodbye to HST. New to Victoria, the HPI (Housing Price Index)replacing reporting of average sale prices. Click here for more details is purported to give us a more stable, honest view of the pricing trends, however, it does not and can accurately reflect value shifts on non-typical properties. Our high end and rural property market has been much harder hit than an average home, that doesn’t show in the HPI. The HPI shows $485,400  now vs. $503,800 in 2008. Then look at a specific example of Len Barrie’s former mansion atop Bear Mountain that reportedly had over 15 Million invested in it, an assessed value at one time of $9,155,000 and just sold for $4,429,222.  Or  a condo that just resold in the Falls for $792,000 that was purchased at the peak for $1.500,000. A great client and friend of mine bought lakefront on Brookleigh on Elk Lake for under 1.4 Million a property that was purchased in 2007 for more than 1.9 Million. sss What does the future hold? Employment figures are solid with jobs growing in our market, vacancy rates are stable, the overall economy seems to be recovering, while they say rates will continue to rise, I can’t see them going up much. We still live in the best city on earth (as a Native Victorian I’m a little biased but even Conda Nasta says we’re #17) and people are coming here every day (I had clients from China, USA and all over Canada last month). I think we are at the bottom of a market cycle, the same only different from historic cycles we’ve seen in our market with prior peaks in 1981 and 1994.  Click here for full CMHC Fall 2013 Forecast I expanded my holdings in 2013, intend to continue in 2014 and I encourage anyone with a long term outlook to do the same. VREB News Release Strong October Kicks off Fourth Quarter Real Estate Sales in Greater Victoria VICTORIA BC - Greater Victoria continued to experience strong home sales during the month of October, reports the Victoria Real Estate Board (VREB). According to the Board's MLS® System, 512 properties sold compared to 373 in October 2012, an increase of 37.27 per cent. There were 4,322 active listings. "While we are all very pleased with the October results, we are tempering our enthusiasm," says Shelley Mann, Board President. "After a slow market for the last half of 2012, we are still climbing back to previous annual sales numbers." Today, the VREB and joins the Canadian Real Estate Association and ten major real estate markets in Canada by adopting a new approach to the reporting of trends in residential property prices. Instead of relying on average and median sale prices which are subject to fluctuation, the Board moved to a new system called the MLS® Home Price Index (MLS® HPI). The methodology used by MLS® HPI has been endorsed by Statistics Canada, Canada Mortgage and Housing Corporation, the Bank of Canada, Finance Canada and Central 1 Credit Union. At the heart of the MLS® HPI is the concept of the "benchmark" home, a notional home comprising the most common attributes of typical homes in a given area. Through the analysis of ten years of VREB MLS® sales data, MLS® HPI has defined benchmark homes for Greater Victoria as a whole as well as for each of our regions, districts and neighbourhoods. In each of these areas, MLS® HPI has defined a benchmark home for each category: single family homes, townhouses and condo apartments. Each month, VREB MLS® sales data will be fed into the MLS® HPI to calculate and track changes in the prices of our benchmark homes. Benchmark prices are generally lower than corresponding medians and averages. MLS® HPI estimates the values of our typical homes, whereas medians and averages merely reflect the overall selling prices of the particular mix of homes that sold in a given month. In a manner similar to the Consumer Price Index (CPI), MLS® HPI maintains a running index of the percentage change in benchmark prices. Like the CPI, the MLS® HPI assigns an index value of 100 to the benchmark prices at its starting point: January 2005. By tracking both benchmark prices and index values each month, MLS® HPI will provide a much clearer picture of real estate market trends in Greater Victoria. "Past reporting of averages and medians showed flat pricing across the Board's trading area but MLS® HPI indicates a moderate decline in prices in many markets over the last year," Mann says. "Benchmark prices are flat month-over-month, and we will be watching very carefully to see where pricing goes. "With average and median prices, it was often difficult to gauge whether prices of typical homes were rising or falling, but the HPI provides us with exactly this type of information," she says. For October 2013, the benchmark price for the Greater Victoria single family benchmark home was $485,400 and its corresponding MLS® HPI index value was 137.2. (This represents a 37.2 per cent increase since January 2005, when the index was 100). This benchmark price increased 0.15 per cent over the past month and decreased 3.18 per cent over the last year. At the regional level, the benchmark price for the single family benchmark home in the Core municipalities was $547,800, a decrease of 0.56 per cent over the previous month and a 2.66 per cent decrease over October 2012. In Westshore, the benchmark price for the single family benchmark home was $410,600, a decrease of 0.37 per cent over September 2013 and 4.37 per cent decrease over October 2012. The benchmark price for the single family benchmark home on the Peninsula was $508,700 for September, an increase of 1.22 per cent over the previous month and a 3.56 per cent decrease year-over-year. There were a total of 274 single family homes sold in September, an increase of 29 per cent over September 2012. September also saw the reporting of 126 condominium sales and 51 townhouse sales in Greater Victoria. Benchmark prices for the Greater Victoria condominium benchmark home and for the Greater Victoria townhouse benchmark home for September $283,100 and $393,100 respectively. Total Waterfront Single Family Dwellings sold: 17, up 2 over October 2012 Total Non-waterfront Single Family Dwellings sold: 257, up 62 over October 2012 Single Family Dwellings sold over $1 million: 16 (1 over $2 million) For more information on MLS®HPI benchmark prices and index values for September, visit www.vreb.org. Those requiring specific information on property values in their area should contact a REALTOR®. The Victoria Real Estate Board has 1,224 Members. VICTORIA BC - Greater Victoria continued to experience strong home sales during the month of October, reports the Victoria Real Estate Board (VREB). According to the Board's MLS® System, 512 properties sold compared to 373 in October 2012, an increase of 37.27 per cent. There were 4,322 active listings. "While we are all very pleased with the October results, we are tempering our enthusiasm," says Shelley Mann, Board President. "After a slow market for the last half of 2012, we are still climbing back to previous annual sales numbers." Today, the VREB and joins the Canadian Real Estate Association and ten major real estate markets in Canada by adopting a new approach to the reporting of trends in residential property prices. Instead of relying on average and median sale prices which are subject to fluctuation, the Board moved to a new system called the MLS® Home Price Index (MLS® HPI). The methodology used by MLS® HPI has been endorsed by Statistics Canada, Canada Mortgage and Housing Corporation, the Bank of Canada, Finance Canada and Central 1 Credit Union. At the heart of the MLS® HPI is the concept of the "benchmark" home, a notional home comprising the most common attributes of typical homes in a given area. Through the analysis of ten years of VREB MLS® sales data, MLS® HPI has defined benchmark homes for Greater Victoria as a whole as well as for each of our regions, districts and neighbourhoods. In each of these areas, MLS® HPI has defined a benchmark home for each category: single family homes, townhouses and condo apartments. Each month, VREB MLS® sales data will be fed into the MLS® HPI to calculate and track changes in the prices of our benchmark homes. Benchmark prices are generally lower than corresponding medians and averages. MLS® HPI estimates the values of our typical homes, whereas medians and averages merely reflect the overall selling prices of the particular mix of homes that sold in a given month. In a manner similar to the Consumer Price Index (CPI), MLS® HPI maintains a running index of the percentage change in benchmark prices. Like the CPI, the MLS® HPI assigns an index value of 100 to the benchmark prices at its starting point: January 2005. By tracking both benchmark prices and index values each month, MLS® HPI will provide a much clearer picture of real estate market trends in Greater Victoria. "Past reporting of averages and medians showed flat pricing across the Board's trading area but MLS® HPI indicates a moderate decline in prices in many markets over the last year," Mann says. "Benchmark prices are flat month-over-month, and we will be watching very carefully to see where pricing goes. "With average and median prices, it was often difficult to gauge whether prices of typical homes were rising or falling, but the HPI provides us with exactly this type of information," she says. For October 2013, the benchmark price for the Greater Victoria single family benchmark home was $485,400 and its corresponding MLS® HPI index value was 137.2. (This represents a 37.2 per cent increase since January 2005, when the index was 100). This benchmark price increased 0.15 per cent over the past month and decreased 3.18 per cent over the last year. At the regional level, the benchmark price for the single family benchmark home in the Core municipalities was $547,800, a decrease of 0.56 per cent over the previous month and a 2.66 per cent decrease over October 2012. In Westshore, the benchmark price for the single family benchmark home was $410,600, a decrease of 0.37 per cent over September 2013 and 4.37 per cent decrease over October 2012. The benchmark price for the single family benchmark home on the Peninsula was $508,700 for September, an increase of 1.22 per cent over the previous month and a 3.56 per cent decrease year-over-year. There were a total of 274 single family homes sold in September, an increase of 29 per cent over September 2012. September also saw the reporting of 126 condominium sales and 51 townhouse sales in Greater Victoria. Benchmark prices for the Greater Victoria condominium benchmark home and for the Greater Victoria townhouse benchmark home for September $283,100 and $393,100 respectively. Total Waterfront Single Family Dwellings sold: 17, up 2 over October 2012 Total Non-waterfront Single Family Dwellings sold: 257, up 62 over October 2012   Single Family Dwellings sold over $1 million: 16 (1 over $2 million) For more information on MLS®HPI benchmark prices and index values for September, visit www.vreb.org. Those requiring specific information on property values in their area should contact a REALTOR®. The Victoria Real Estate Board has 1,224 Members.

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The Neal Estate Team is your #1 source for all of your Victoria BC real estate needs. Get in touch with us online or by phone at (250) 386-8181 to speak with a Victoria real estate buying or selling expert today. With decades of experience as a top selling Victoria REALTOR® and ranked in top 1% globally with over 4,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Team have the industry experience and market knowledge to help you make smart and informed buying or selling decisions. 


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