The Neal Estate Team's Victoria Real Estate Update for July 2020

Pent up demand, market recovery, and persisting uncertainty. These are just some of the phrases that can sum up the past couple months of the Victoria Real Estate Market. Junes strong numbers following May’s start of the recovery certainly point to lots of pent up demand, but that leads to the question of how much pent up demand is there and what other factors are affecting the market right now. "Pent up" demand essentially meaning that the spring market has arrived late and we currently in a delayed market and that we sold in May and June what we didn’t in March and April. 

Looking at the sales numbers, the Victoria area had a total of 808 sales in June, 76.8% higher than May 2020, and 9.6% higher than June 2019. Single-family dwellings led this surge with 460 sales, up 18.8% from June the previous year. Condo’s lagged behind a bit with 209 sales, 3.2% down from the previous year.

Looking at the inventory numbers, the end of June 2020 had 11.3% fewer properties available to potential buyers than June 2019. Inventory did increase 6.1% from  May 2020 though, bringing the total number of listings on the market to 2,689.

Simple economics tells us that the increase in demand and the low inventory will affect price and the nature of the market itself. For example, we are seeing that it is not uncommon for well-priced properties to be selling in multiple offers; the average sale price was 98% of list price in June, and the benchmark price for a single-family home hit $896,000. Speaking of benchmark price (according to The Home Price Index), the aforementioned SFD price was up 4% from the same time last year and 1.2% up from the previous month. Condos, on the other hand, decreased 1.6% in benchmark value from the previous month but was 1.3% more than June the previous year, hitting $525,600.

There are many factors contributing to the activity of the market other than COVID “pent up demand”. CMHC as also announced measures that will decrease the purchasing power for those without a significant down payment (over 20%). We could be seeing some extra activity as people try to make their purchases before those measures take effect. This is supported by the fact that there has been a sharp uptick of first-time buyers purchasing in this market. It should be noted however that there are alternatives providers of mortgage insurance and they have claimed they will not be following CMHC in their policy changes, for now. Another factor that could be affecting the market is the end of the blanket ban on rental evictions and now transactions needing vacant possession can proceed (although eviction for unpaid rent was not one of the restrictions removed). The last major factor that could be affecting the market is very low-interest rates.

In summary, it looks like the market is recovering post-COVID restrictions well in a somewhat product-specific manner. Pent up demand, low inventory, and other factors are contributing to the flurry of activity but it remains to be seen how sustained the activity will be. As with all things on a large scale that are outside the norm, there is an underlying anxiety that is yet felt by many. That being said, if you are thinking about selling, now is a great time to sit down with one of our Neal Estate Team professionals. Our team continues to outperform the market, we had $22,955,800 firm sold in June, a 150% increase from $9,156,400 in June 2019.

If you would like to know how we are beating the market and helping our clients win, please click Here for a FREE consultation. Ask us about featuring your home on VictoriaComingSoonListings.com to ensure the best results and we hit the ground running together as we get to the other side of this.

Stay safe,

The Neal Estate Team

Your Victoria & Vancouver Island Real Estate Experts

“Let our experience be your guide
www.RonNeal.com
www.HomesOnVancouverIsland.ca

Ron Neal	Jul 11, 2020, 11:00 AM (2 days ago)		Reply
to me

Ron Neal	Jul 11, 2020, 11:00 AM (2 days ago)		Reply
to me