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Strong and Balanced Real Estate Market for Victoria in 2008

Incoming President’s predictions for next year, and my interpretation.

Tony Joe, 2008 president of the Victoria Real Estate Board, says the Victoria area housing market should remain strong and stable in the coming year. “During the past couple of years we have seen a return to a more balanced market. Demand remains remarkably strong and prices continue to rise, but at a more moderate pace than we have seen in recent years. Barring unforeseen circumstances, all indications point to continued strength and stability in 2008.”

Joe added that the Board will enhance its efforts to “go green” in the coming year. “One of the Quality of Life principles adopted by our Board is ‘preserving the environment’ and we intend to further our efforts to promote green values as part of the real estate transaction,” he said. Joe noted that the Board has had some initial discussions with the Ministry of Energy, Mines and Petroleum Resources about new ways to encourage home owners to heat their homes more efficiently. “We’ve volunteered to run a pilot project in Greater Victoria to inform buyers of the energy efficiency rating of various homes. We think growing public interest will prompt more and more sellers to do all they can to get their homes ‘energy-ready’ before they list for sale,” said Joe.

Joe noted that the Board has also volunteered with the Ministry of the Environment to run a pilot project in our Board area to notify buyers of a home’s ‘water-conservation measures’. “We think REALTORS® can play a key role by helping to rate a home based on its use of such items as low-flush toilets, low-flow shower heads, front-end loading washing machines and the use of grey water and rain water,” he added.

The 2008 Board of Directors is as follows: Tony Joe – President; Chris Markham – President Elect; Bev McIvor – Past President; Carol Crabb – Secretary-Treasurer. Other Directors are: Jane Logan, Randi Masters, John McVie, John Smith and Lorraine Stundon.

The 2008 Directors take office effective January 1.

This prediction echoes my personal comment about next year. I believe the continuing strength of the Canadian economy, and in particular, the continued strength and diversification of the Capital Region’s economy will keep prices steadily increasing, but at a slower rate.

The continuing economic woes in the United States and threat of a recession will force the Bank of Canada to maintain the low interest rates or reduce them further to avoid crippling the Canadian economy, which is surely to be affected by the situation in the United States.

Why is the Canadian economy booming, while the United states is suffering? I’ve written about this before, but it’s worth mentioning again. I read this post on a local real estate bear blog which, while clever, is wholly inaccurate. What the bubble-blowers here in Victoria fail to note is that the reasons for our continued economic success here in Canada are not the usual Canadian success stories of manufacturing in Ontario and Quebec brought on by a favourable exchange rate. The rise of the dollar over the last 24 months and the expansion of our economy is driven by global demand for what Canada has to offer: minerals, resources, oil and gas, wheat, technology. This time around is different. Prices here in Victoria are not inflated beyond their sustainability. These $100,000 price drops are not going to happen. Not in 2008, anyway.

The bears will gripe: “the statistics are skewed!” “too much marketing spin!” They will argue that as REALTORS®, we have a vested interest in making the statistics look favourable so we make more money. Of course, with any industry-produced statistics, there can be some professional bias. What they can’t ignore (but often try to) is that as REALTORS®, no one else works as closely with the buying and selling of real property in the area. No one else is as experienced as we are with what the numbers mean. And, no one else depends on an accurate and objective interpretation of the real estate statistics as a REALTOR®.

So, yes, we certainly do have a vested interest in accurate real estate statistics. Our livelihood depends on it.

I hope everyone enjoyed the surprisingly strong real estate market in 2007. Last December, the bubble blowers said 2007 would be the year. I’m not surprised they’re calling for it again this year.

Happy New Year, professionals!

Tim Ayres

  • Wilhelmina

    I just passed my real estate exam and am thinking….now what? Was looking around at different sites. I really enjoyed viewing your site. This must be an amazing amount of work and expertise to keep this current. Very well done. Thank you for the inspiration. I did sign up to get your newsletters online and hope that this is okay.
    Thank you
    Wilhelmina

  • Irrational Exuberance

    Any economist would tell you that the Canadian economy has been stagnant for almost 2 years… not booming (look at the TSX stats). Housing prices are based on supply and demand… it doesn’t take an economist to figure out that investing in the BC housing market right now could be very dangerous. I think the VREB stats speak for themselves – lots of inventory and less demand. I’m a consultant that is working on alot of the larger resort and urban condo developments across BC and many of my clients are getting nervous…. Anyways, we will see how things evolve next Spring….. I think you probably know whats up too… but it’s not good for business to discuss such things…. The only reason I wrote this is I’m just so tired of reading predictions that may lead to less knowledgable famalies ending up over extending themselves based on false predictions…

  • Dave

    You would have to be seriously dimb or delusional to think that prices can only fall 30% now that investor sentiment has changed, supply far exceeds demand, and the world is slipping into a recession.
    We will be lucky to get out with only a 50% drop!
    Especially in a backwater town like Sooke which had gone too high too fast.

    Prices will go up again just give it 25 years or so…..

  • Hi Dave, thanks for your comment, even though it’s a bit late as this post was written at the end of 2007.

    I’m not sure what you mean. 30% from what? If you mean 30% from their peak in April or May of this year, I think you’re wrong. Supply is trailing off as many people who don’t need to sell or aren’t confident in selling right now just aren’t bothering to list their homes for sale.

    Contrary to what some people believe, the real estate market is not the stock market. There are not countless “investors” who hold portfolios of properties like they hold portfolios of stock. The fact remains that most homes sold in our area are traded between people moving into, out of, and within the region.

    General demand will increase once this economic storm blows over. People still need to move into and out of the region, and smart buyers will be buying in the next 6-12 months.

    Sooke isn’t a “backwater town.” It’s a growing, improving and diversifying are whose residents are lucky to live here. Low taxes, a clean environment, and peace and quiet, which is more than I can say for many towns in our region.

    It was very brave of you to use an anonymous e-mail address for your comment, too.