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

Posted by Ron Neal on Tuesday, August 16th, 2022 at 4:20pm.

Reviewing July and August to Date in the Victoria Real Estate Market - Both July and August have seen a huge decrease in property sales in Victoria as well as significant increases in inventory. And as of August 15th, Victoria is trending well under half last year's sales volume (12.6 sales per day compared to 28.8 sales per day in August last year). These numbers show a continuation of a slow down which was present in July and will likely continue at least until the end of the month and likely longer. This “slow down” relieved a lot of pressure from any buyers who are still out there looking and is considered by most to be a sign of a pretty reasonable market correction. The swift change has revealed lots of opportunities where there might not have been any previously and long-term experience of market change has become even more valuable in a market like this. We have continued helping our clients navigate whatever the market throws at us and while sales were down in BC by over 40% in July compared to July 2021, our Group increased our sales by more than 10% in the same time period! Creating more wins than ever for our clients. 

Getting into the Numbers - There was a total of 510 sales in July which was a 38.9% year-over-year decrease and a 16.7% decrease from June. That level of sales is a long-time-low and significantly below the average sales for July historically. Of those total sales, 254 were single-family homes and 172 were condos. Single-family home sales were down 35.9% year over year and condos were down 39.4% in the same period.

With the slow down in sales, inventory had lots of room to grow and we ended July with 2,162 active listings which is 5% higher than June and a whole 70.2% higher than the 1,270 active listings we had at the end of July 2021. This level of inventory puts us at 4.2 Months of Inventory (listings/sales) which still keeps us in a seller's market by the traditional definition. The rate at which we are getting new listings onto the market is increasing and we have more listings per day in August (as of Aug 15th) than we did in August last year (although only marginally). Again, this is at the same time that sales per day are well under half in the same comparison.

Considering Price - Prices have been flirting with decreases and these flirtations are now being picked up by Home Price Index (HPI) reports. Keep in mind that these reports always lag slightly behind the real-time market. Benchmark Price for a single-family homes dropped 2.1% from the previous month (still up 19% from last year) to hit $1,433,800 and condos dropped .5% from last month (still up 27.3% from last year) to hit $639,600.

Looking Forward - There are a few different scenarios that could play out on price and sales. First, prices could continue to fall as affordability restricts the demand side even further and more inventory builds. We are likely to see another rate hike coming this year and without buyer confidence, this is a very possible scenario. The second scenario, somewhat supported by the trends we are seeing in the data is that decreases in sales volume and price will continue but more moderately than we have already had. While month over month stats are decreasing they are already decreasing at a slower rate and it seems that much of the hesitancy is already baked in, especially in sales volume. Lastly, we could see everything pick back up in September as new listings come back on and mortgage rates reach their potential peak (after one more hike). We are still well below historical averages for inventory so any significant return of buyer interest could put us right back to where we were 6 months ago. Shaking the magic 8 ball says likely something between the first and second scenarios.

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.

Stay safe,

The Neal Estate Group
Your Victoria & Vancouver Island Real Estate Experts
“Let our experience be your guide
www.RonNeal.com
www.HomesOnVancouverIsland.ca

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The Neal Estate Group 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 5,000 transactions and $1 Billion SOLD, Ron Neal & The Neal Estate Group have the industry experience and market knowledge to help you make smart and informed buying or selling decisions. 


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