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 the 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.
Ladies and gentlemen, let's break down some real estate facts and figures coming at you from the Victoria Real Estate Board as of January 2024. Today, I have some exciting news that I'm sure you buyers will be thrilled to hear about! I know you love your numbers, so let's dive right into it.
In December 2023, a total of 329 properties changed hands in the Victoria Real Estate Board region, which is a solid 2.8 percent bump compared to the 320 properties that sold in December 2022. However, it's worth noting that this marked a hefty 16.5 percent drop from the previous month, November 2023. Now, if we're talking about specific property types, condo sales saw a decent increase, up an impressive 14.9 percent from December 2022 with a total of 108 units finding new owners. Single-family homes also saw a slight uptick, with a 1.3 percent increase from December 2022, tallying up to 158 houses sold.
But let's not forget the bigger picture, folks. In the entire year of 2023, there were 6,207 properties that found new owners, but that's 8.77 percent less than the 6,804 that were sold in 2022. Although not a massive drop, it's still a decline in overall sales compared to the year before.
Now, what about the cold, hard numbers on home prices? In December 2022, the Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core was $1,236,500. But by December 2023, that value had seen a 2.5 percent bump, clocking in at $1,268,000, although it did dip a tad from November's value of $1,286,400. Now, for the condo enthusiasts out there, in December 2022, the benchmark value was $565,800, but by December 2023, it slipped by 0.7 percent to $562,000, down from November's value of $577,400.
The Victoria Real Estate Board Chair, Graden Sol, said a few things about this market. He highlighted how the market's been shifting back to those traditional seasonal patterns. And you know what? That's music to the ears of sellers and buyers alike after enduring a wild five years of real estate market turmoil. A more predictable market is something everyone can get behind. If this trend continues into 2024, we might see more properties hitting the market in January and February, leading to an upswing in sales as we head into the spring season. Just like clockwork, December lived up to its reputation as a slow month in terms of sales and new listings.
Now, when we talk numbers, let's not forget the inventory. At the end of December 2023, there were 2,132 active listings on the Victoria Real Estate Board Multiple Listing Service®, which is a substantial 19.4 percent drop compared to the previous month of November. However, when you stack that against December 2022, that's also a massive 26.3 percent increase from this time last year. The game's changing, my friends.
But here's the kicker: the single most significant factor that's been shaking things up this year in the housing market—interest rates. Chair Sol points out that the increased cost of borrowing has been putting a squeeze on consumers' purchasing power, leading to a drop in transactions. But here's the thing: there's still a massive demand for housing in this market. So, as we roll into 2024 and beyond, the key is to focus on cranking up the supply to keep a lid on those price hikes. It's all about bringing supply closer to meeting demand. Even though we've seen a meteoric rise in inventory since this time last year, this may only be a temporary reprieve for buyers. While many analysts are anticipating a fall in real estate prices during the first half of 2024, some are predicting an overall rise in real estate prices by the end of the year. If we do see the Bank of Canada drop interest rates this year, as many are predicting, then that's likely to invite increasing demand back into the market. A surge in demand could reverse the current glut in supply. If that happens, look out! The return of competitive markets and rising prices could be right around the corner.
A Massive Buying Opportunity:
Now, here's the part that has me really excited for the beginning of 2024! While many buyers and agents are focused on active listings, a lot of buyers and agents are liable to ignore the much larger volume of canceled, expired, and withdrawn listings. These off-market listings have owners, and many of those owners still want to sell! So, while interest rates are high and general demand is low, there is a golden opportunity for savvy, motivated buyers and investors to jump into the market and scoop up a dream property for an amazing price! Do you want to find a property for $50,000-$150,000 off of asking? Well, now is the time to start writing offers and see what lands. While others are still hesitating, this is your unique opportunity to peruse active listings that few people are looking at and write offers on off-market opportunities that almost no one is considering!
But hey, the real estate market is a complex beast, and it's influenced by many factors, so if you're thinking about buying or selling in 2024, you know the drill—get in touch with me for a game plan tailored just for you.
So there you have it, folks. The real estate landscape in Victoria is evolving, influenced by interest rates and a return to those good old seasonal patterns. For those of you navigating this maze, let me know how I can help guide you in this ever-changing world of property ownership. Stay informed, stay smart, and make those real estate moves wisely!
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
Contingency
A contingency can be explained as a clause in a formal real estate contract that states there are certain conditions that must be met by either the buyer or the seller in order to continue to the next step in the contract. There are contingencies in almost every real estate contract. They are there to protect the buyer and the seller. If the contingencies are not met, there might be a breach in the contract, and the transaction could fail to close. Some common contingencies for buyers include financing, inspection, strata document review, title review, and insurance. However, there are many different contingencies that can be included to protect both buyers and sellers.
Read More:
Resources
1. VREB Insight:
2. Mortgage Calculator:
3. Mortgage Rate By Bank:
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