The Neal Estate Team's Victoria Real Estate Update for July 2021

Sales volume decreased 10.2% from May to June 2021 with 942 sales total for the month. This is the third consecutive month of declining sales volume from the peak in March. Although it is typical for the market to slow down somewhat in the summer, we could also be seeing the beginning of demand burnout as buyers that were pulled forward by low interest rates have either bought or dropped out. On the other hand, the drought of new listings and low inventory levels are the obvious maximum constraint on demand and it might be that if new inventory is added the sales numbers might jump to match.

By property type, single-family homes sales were down 18.1% from May with 440 sales (down 4.3% from June 2020); condo sales on the other hand were up 4% from the previous month to hit 338 sales (61.7% up from the previous year).

Inventory continues to be the real underlying problem in the struggle to reach something resembling a balanced Real Estate market. According to CPABC (Chartered Professional Accountants of British Columbia), BC’s population increased by 737,206 between 2010 and 2020 but only 316,510 units were added to the inventory in the same time period. Vancouver Island and Victoria are especially vulnerable and the inventory situation has been exacerbated by COVID travel restrictions. 

June ended with 1,375 listings on the market, 1.45 months inventory (5.2% fewer listings available than in May). Even if sales continue to decrease we will likely see multiple offers continue on well-priced listings at least until the supply exceeds 2 or 3 months of listings. The city of Victoria has taken some action by fast-tracking non-profit developments. While any additional supply is good, creating an environment to incentivize private development for a profit is a longer-term solution (a solution that costs the city nothing and increases the tax base).

Single-family home prices (according to the Home Price Index) increased 18.6% year over year to hit $1,063,500 in June (up 2.6% from May). Condos hit $531,100, up 8.3% from the previous year. Looking into the future for pricing in Victoria there continue to be many factors to push pricing up (like inventory) but we are starting to see factors that could keep pricing more stable (like used up demand). We are already seeing a slow down especially in the single-family segment as anyone who wanted and was able to buy in that price range has done so already. There might be some gains in pricing yet to go, but we could also see prices levelling off in the not-so-distant future. Especially if listings start to sit with more days on market.

We at the Neal Estate Team celebrated the easing of restrictions by holding our weekly team meeting on the ocean in kayaks this week and we are all looking forward to serving up turkey dinner at Our Place Society next week for our annual Christmas in July dinner. To get involved or if you are interested in joining our team, click here

If you would like to know how we are beating the market, helping our clients win, and keeping people moving safely, please click Here for a FREE consultation. 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 Team
Your Victoria & Vancouver Island Real Estate Experts
“Let our experience be your guide
www.RonNeal.com
www.HomesOnVancouverIsland.ca