Monthly Housing Market Update
Caleb's Perspective on the Market
Overall, the Victoria real estate market continued to slow in November, but there are a few indicators that suggest a turnaround may be on the horizon. Although sales and median prices both fell in November, overall inventory for sale dropped as well, so buyers have less to choose from compared to October.
A total of 374 residential properties sold in November. Residential inventory bucked the trend and dropped for the first time this year. Total residential inventory for sale is now down to 2,053 active listings.
My favorite indicator, the sales-to-active-listings ratio, reversed trend in November, although only slightly, and it now sits at 18.2%. Another way of looking at this number is to say that this is our current demand relative to our current supply, and it has increased for the first time in 6 months. We are still very close to a buyer's market.
Even though prices and sales are down in Victoria, is the real estate market showing signs of a rebound? I would say it is possible, as sales seem to be finding a bottom, while inventory is now heading lower. This is why our months of inventory fell, although slightly.
Close to Buyer's Market!
Also, mortgage rates have seemingly peaked and may start to head back down in the new year. Will these factors continue, or is it just a blip (the old dead cat bounce) on a further slide down? No one can be sure, but either way I'll be watching and I will send you my market update next month! Until then, have a great month and stay tuned.
Slower winter markets can benefit buyers and sellers
December 1, 2023 A total of 394 properties sold in the Victoria Real Estate Board region this November, a 2.6 per cent increase from the 384 properties sold in November 2022 and a 3.2 per cent decrease from October 2023. Sales of condominiums were down 11.8 per cent from November 2022 with 120 units sold. Sales of single family homes increased by 6 per cent from November 2022 with 193 sold.
"It's unsurprising to see this slight relaxation of sales in the market," said Victoria Real Estate Board Chair Graden Sol. "Given the current interest rate environment, our sales numbers are lower than long term averages, but the pattern of seasonality within those lower numbers is what we would expect for this part of the year. We have seen a healthy twenty-five per cent increase in the number of listings on market compared to last year and this is positive news as we recover from that long-term trend of very low inventory."
There were 2,644 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of November 2023, a decrease of 4.1 per cent compared to the previous month of October and a 25.2 per cent increase from the 2,111 active listings for sale at the end of November 2022.
"The longer we are in balanced market conditions, the easier transitions for buyers and sellers become," adds Sol. "Local people who planned to sell and move within the Greater Victoria area may have hesitated to list their homes back when record low inventory meant less choice when they became buyers. Now that we see some balance in the market, these people have more inventory to pick from and may feel more confident listing their existing home. And of course, all buyers are having better experiences with more time and more choice. We always anticipate a seasonal reduction in activity over winter, but if you are contemplating a move in the new year, now is an excellent time to consult with your favourite REALTOR® to create your strategy."
The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in November 2022 was $1,248,600. The benchmark value for the same home in November 2023 increased by 3 per cent to $1,286,400, which is down from October's value of $1,305,900. The MLS® HPI benchmark value for a condominium in the Victoria Core area in November 2022 was $568,400, while the benchmark value for the same condominium in November 2023 increased by 1.6 per cent to $577,400, which is down from the October value of $585,600.
About the Victoria Real Estate Board - Founded in 1921, the Victoria Real Estate Board is a key player in the development of standards and innovative programs to enhance the professionalism of REALTORS®. The Victoria Real Estate Board represents 1,647 local Realtors. If you are thinking about buying or selling a home, connect with your local Realtor for detailed information on the Victoria and area housing market.
Notes for Interpreting Our Statistics
The use of sale price statistics can be useful in establishing trends when applied over a period of time, i.e. six months or longer. The Victoria Real Estate Board cautions, however, that such information does not indicate the actual value of any particular property. Those requiring specific information on property values should contact a REALTOR®.
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Courtesy of the Victoria Real Estate Board
Interpreting the Stats
I believe that one of the best indicators to gauge the current real estate market is the sales-to-active listings ratio. Instead of just focusing on the number of sales we have in a given month, the sales-to-active listings ratio expresses the number of sales as a percentage of the active listings that are currently available for sale. In other words, current levels of demand relative to current levels of supply. For example, if we had a sales-to-active ratio of 50% this would mean that in the entire Victoria Real Estate Market we would have just 2 months of inventory for sale. In other words, if this level of sales were to continue, it would take only 2 months to sell all of the remaining listings on the market.
What does this mean for prices? Well, generally, less than 4 months of inventory indicates a seller's market with prices increasing more the lower that this number goes. On the other hand, more than 6 months of inventory generally results in a buyer's market with prices dropping. The longer the trend remains, the stronger the correlation to price increases/decreases. Interest rates, new building starts, wages and the state of the economy all have an effect, but essentially it is the amount of demand relative to inventory available for sale that drives the market.
- Caleb Mickelson