The Neal Estate Group's Real Estate Market Update for Victoria for January 2023

Victoria Market Overview - As we marked the start of a new year, we took the opportunity to look back at Victoria Real Estate’s journey in 2022. The year began with record-low inventory, high sales, and rising prices; however, lending rates increased in response to inflation fears and prospective buyers paused as affordability became a greater challenge. Home Price Index Benchmark prices peaked in June, but by the end of the year, single-family homes in the core had declined 12.3%, bringing them back to their December 2021-January 2022 Benchmark prices. Although the market is showing signs of a more balanced market, inventory is still low and the lack of buyer participation is keeping it that way. If buyers return in force, the market could quickly shift and resemble what it was in the past.

The recently released 2023 BC assessments have experienced a significant increase compared to the values in 2022. This is unsurprising given that the assessments reflect the market values from July 2022, when properties were generally selling higher than their assessed value (and again, Benchmark prices are down 12.3% from then). It is important to remember that an increase in your assessed value does not necessarily mean an increase in your property taxes. The most important factor is not the amount of change in your assessed value, but rather how it compares to the average change of your property class in your municipality. 

If you think your BCAA property assessment does not reflect your property's true value, you have until February 1, 2023, to appeal. You can find helpful information on their website at www.bcassessment.ca. It is not uncommon for assessments to be either higher or lower than the actual market value. Unreported renovations or neglected maintenance can lead to inaccurate valuations, resulting in you paying more in property tax than you should. If you would like assistance in determining the fair market value of your property and access to relevant sales information in your neighborhood, please do not hesitate to contact us; it is our pleasure to offer our assistance without obligation.

Getting into the Numbers - In the Victoria Real Estate Board area, the total number of sales for 2021 was 6,804, a 32.3% decrease from the 10,052 sales of the previous year. December specifically was a slow month for sales, even compared to the past traditionally slow months. There were 320 sales in the VREB Area, 26.9% less than the previous December and 16.7% less than in November. There were 156 Single family home sales, down 24.6% from last year, and 94 condo sales which were 38.2% down.

 The Neal Estate Group weathered the storm better than the VREB average of  32.3% decrease in sales as our group's sales only decreased 16.4%, gaining 15.9% market share.

Inventory didn’t make the push we would have liked to see in December and instead decreased 20% from November with 1,688 listings on the market at the close of the year (it is typical to see a slight decrease in those months). On the bright side, that is a 158.9% increase compared to the end of 2021 which definitely is providing more options for buyers now. In large part due to the small number of sales, our months of inventory (available listings divided by monthly sales) hit 5.27 which puts us well in a buyer's market. It is important to remember that months that are traditionally slow will yield less reliable numbers for months of inventory metrics.

Considering Price - As previously mentioned, Benchmark prices for a single-family home in the core are down 12.3% from the peak, coming in at $1,262,600 (3.4% from November's price). Condos in the core peaked in June at $643,100 falling 10.7% to $574,300 at the end of the year.

Looking Forward - As we look to the future, the clarity of our crystal ball is limited. There are many variables in the near future, government influences are a major factor. The ban on foreign buyers is unlikely to have a huge impact on our market as they are already a small portion of our buyers, but new policies like the removal of rental restrictions and age restrictions will likely have more of an impact. Anything coming down the pipe in regards to the removal of tax benefits for investors and flipping deterrents will too, both of which are being talked about. The biggest factor to watch will of course be the lending rates. If rates stabilize prices likely will also. If rates stay put for an extended period of time we could be looking at a relatively slow market in 2023 compared to what we are used to. Ultimately, long-term stability will depend on the availability of housing supply.

Neal Estate Group Highlights - As we look forward to the new year, the Neal Estate Group is filled with gratitude for the season of giving we have just experienced and the time we got to spend with our families. We are deeply appreciative of our clients, team, and community for their ongoing support, which enables us to do what we do. 

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