What does the current Victoria real estate market look like?
As part of our monthly Market Insight Series, I am excited to continue to bring you regular insights into Victoria and Vancouver Island market trends, so you can make better buying and selling decisions. Below I will jump into the most important market numbers to look into, I will provide glossary term definitions, and will conclude with resources if you want to further research current trends and stats. If you want to see what the Market Insight for the previous month was click here.
Hey folks! Today we're talking about the early spring real estate market in Victoria. According to the Victoria Real Estate Board, there were 590 properties sold in March 2023, which is 29.2% fewer than the 833 properties sold in March 2022.
Although the market has been down for a while due to higher interest rates, things are not all bad news. The Victoria Real Estate Board Chair, Graden Sol, says that the return to confidence in the market is continuing, and demand is recovering. In fact, there were 1,970 active listings for sale on the Victoria Real Estate Board Multiple Listing Service at the end of March 2023, an increase of 8.9% compared to February and an 85.3% increase from March 2022.
Now, here's where it gets interesting. The MLS Home Price Index benchmark value for a single-family home in the Victoria Core in March 2022 was $1,387,200. But in March 2023, the benchmark value decreased by 10.9% to $1,236,200. Similarly, the benchmark value for a condominium in the Victoria Core area in March 2022 was $616,400, while in March 2023, the benchmark value decreased by 9.1% to $560,300. Fortunately for home owners this is a milder decline than what some are facing in other parts of the country. However, it's likely nearing the bottom of the current real estate correction according to RBC and BMO who are both offering forecasts which suggest that the bottom of the market will happen this Spring. With the low levels of inventory, and the property absorption rate already soaring to 38% (+20% being considered a seller's market under normal circumstances), this could mean that we are setting up for a much warmer market this Summer. If you are ready to buy or invest in a property then it seems increasingly likely that you'll want to make your purchase now rather than wait. However, if you are thinking about selling your home this year, then you may want to hold off so you can catch the potential upcoming Summer wave.
One other longer term trend to be aware of is the current BC Real Estate Association Mortgage Rate Forecast. Based on the table below you can see that the professional association is anticipating both a flattening out of the variable rate this year, and the begining of declining variable rates in 2024. This is encouraging news for home owners and buyers alike.
So, what does this all mean? Well, it seems like consumer confidence and growing demand are indeed reflected in the early spring market in Victoria, and things are looking up. However, the impact on pricing remains uncertain due to low inventory across the community. As the Spring market continues to strengthen, we may start to experience some upward pressure on pricing again. It's important to keep an eye on these trends and work with your realtor to better understand the market you're in.
Below is a table that outlines the current housing benchmark pricing along with a sample calculation that can give you an idea of what it might cost you to own a home.
Opportunities for ordinary people looking to get into their first home, or move up into an affordable nicer home are still out there, it just takes a bit of diligence, and ideally the support of a committed agent.
Conclusion
The goal is to give you insight into what the overall market view looks like in Victoria and Vancouver Island. I have included more Resources below so that you can dive in and read more at your leisure. I will also make sure to include a new Glossary Term each month, and define it to add to your knowledge of common industry terms.
Feel free to contact me if you want to learn more or if you have any questions about the broader market trends.
Glossary Term
Rowhouse/Townhouse
A row/townhouse as it sound is a row of houses stacked side by side. These are organized as a strata property such that strata bylaws apply and the collective common property is maintained by the strata via a monthly strata fee. Similar to a condo unit, but larger in size often having 2-3 floors and garage parking.
Read More:
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank: