The Neal Estate Group's Real Estate Market Update for Victoria for April 2022

Reviewing February and early April of the Victoria Real Estate market we see that there may be early tremors of that long-anticipated phenomenon: market change. While we are currently still very much in tight and heavily seller-leaning conditions, there are speculative reasons that things could be slowing down. While the data still points to things continuing as per “new normal”, ie: record low inventory, more buyers than sellers (and a high ratio at that), and multiple offer bidding; there are some shimmers in the crystal ball. 

For one thing, much like other investment vehicles, individuals look at data, while the market itself is actually driven by social perception. A rising market is when buyers are saying: “If I don’t buy today I will have to spend more tomorrow”. In these markets, buyers will drive the price as they are willing to bet on the present over the future. All that is really required for our market to change is for conditions to exist which make sellers say: “If I don’t sell today, my home will be worth less tomorrow”.

So what conditions would be needed for the former statement to turn to the latter? Well before we take our own stab at that question in the ‘Looking Forward’ section let’s briefly review how the Federal government finally decided to try to address it. Some of the measures put forward in the new Federal budget Here are:

• A first-time home buyer's incentive.
• A home buyer’s bill of rights
• Ending blind bidding.
• A foreign home buyers ban (for 2 years).
• Talk about an anti-flipping tax (in 2023).

Without going too deep into it, the home buyers' incentive will combine the benefits of an RRSP and TSFA account and give a tax break on money coming in AND out of the account when used for a first-time purchase. The foreign buyer ban is interesting as it is a problem that has already been somewhat solved by the foreign buyer tax. Foreign buyers account for about 1% of purchases in 2020-2021 compared to close to 10% in 2015 and 2016 before the tax. It was expected that there would be new policy measures coming down the pipeline and the implications of these policies will become more apparent over time. For a more in-depth look Here is an article from the BC Real Estate Association.

Getting into the numbers, March had a total of 833 sales, up 16% compared to February but down 29% from March the previous year. Considering “the spring market” and how much tighter the inventory is than last year neither of these numbers is surprising. 412 of those sales were single-family homes and 279 were condos (SFHs down 28% from March 2021 and condos down 26%).

The number of listings on the market increased a very nice 25.2% from the end of February to the end of March to hit 1,063 properties for sale. Again, not uncommon for spring. Year over year, this March had 18.9% fewer listings than the same month last year. As of April 11th, we have already had 439 new listings come on the MLS and the ratio of sales to new listings is looking significantly better than April last year.

Looking at supply, demand, and Considering Price, all at once we can summarize by saying inventory was record low for the month, sales were almost 10% over the 20-year average, and unsurprisingly considering the first two factors, prices (single-family homes specifically) were the highest they have ever been. The benchmark price for single-family homes in the core hit $1,233,700 which is $265,200 (27.4%) more than the benchmark price for the same area last year and up 3% in a single 31 day period. Condos increased 27.8% annually up to a $653,100 benchmark price. It is important to remember the Home Price Index data is historical by its nature and is great for predicting trends… after they happen. If the market were to change, we will see it anecdotally in buyer and seller behaviour before any statistics are reported and definitely before those statistics are picked up and interpreted by the media.

So, Looking Forward, what are those aforementioned tremors and anecdotal insights? Our boots on the ground Realtors (12 Realtors - 24 boots), are seeing fewer multiple offers, more listings being added to the “coming soon” hopper, and some of our buyer clients getting accepted offers under the asking price. Interest rates are still rising and that will have an impact on affordability, aka the demand side and straight-up buyer fatigue is definitely in play. We aren’t in a balanced market yet by any stretch, but that social perception question could be just starting to shift. With basically all restrictions finally lifted, active government action on housing, and careening inflation, it will be interesting to watch who is betting on the present over the future.

March Neal Estate Team Highlights include getting back into planning our annual community Easter Egg Hunt after a multi-year hiatus. For those interested in details Here is the events page. As always, all proceeds will go to support BC Children's hospital.

Click Here for a FREE consultation or call 250-386-8181. Find new listings before they get to MLS and ask us about featuring your home on VictoriaComingSoonListings.com, where we generate interest while you're getting ready to come to market. Ask us also about our FREE Staging Consultation for advice on preparing your home in its best light for the market, ensuring you the best results.