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2007: A Surprising Year for Victoria and Sooke Real Estate

Year-end and December 2007 Statistics Released

The Victoria Real Estate Board has released the December 2007 and year-end statistics:

Real Estate Records Broken in 2007

The value of all property transactions through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) hit a new record of over $4.1 billion in 2007, up from $3.3 billion in 2006. The value of single family home sales was over $2.5 billion while the value of condominium sales was over $756 million. Victoria Real Estate Board President Tony Joe noted that both sales and prices for all major property types increased last year. “Last year was another exceptional year for the local real estate market. The total number of sales increased over 12 per cent while the overall average price for single family homes rose 8.5 per cent; the average for condominiums rose over 11 per cent and the average for townhomes rose 10.5 per cent,” said Joe.

Meantime, the sale of 14 single family homes in Greater Victoria over $1 million pushed the average price to a new record high of $624,450 last month [Note: The sale of an island completed last month for $7 M, which would have skewed the average considerably – Tim] ; the median price, however, was considerably lower at $536,000. “It’s always important to bear in mind that the average price in a given month can often be significantly affected by the sale of high-priced homes,” noted Joe. The six-month average for single family homes in December was $581,419.

The average price of all condominiums sold in December was $332,793; the average for the last six months was $319,980. The median was again lower at $292,900. The average price for townhomes sold last month was $445,960; the average for the last six-months was $415,648. The median price was $387,900.

There were 408 MLS® sales last month, up from 385 sales in December of last year. There were 623 sales in November. Sales last month included 202 single family homes, 120 condominiums, 46 townhomes and 8 manufactured homes.

There were 2,799 properties listed for sale on the MLS® system at the end of last month, up from the 2,650 properties in the same month a year ago.

 

Summary Report and Graphs

Monthly Sales Summary
Average Selling Price Graphs
Active Listings, New Listings and Sales Graphs

At the end of 2006, listings had been steadily increasing, and sales were lower than the booming year of 2005. Everyone was on edge for expectations for 2007. The year surprised us all, with interest rates rising by one-quarter per cent and then being cut by that one-quarter in December. Steady, low interest rates breed consumer confidence and keep home ownership possible as increasing prices erode affordability. An increase in good-paying jobs, record-low unemployment, and migration and investment from out of the area all helped to push the market to record heights this past year.

What does 2008 hold? I see steady price increases, but on a slower, more moderate scale. As prices increase, affordability continues to be eroded. The Bank of Canada meets on Jan 22, with David Dodge expected to announce a cut in interest rates as his final duty before stepping down as governor. The continued diversification of the local economy, with more high-tech jobs and the decline in tourism from the U.S. being replaced with domestic and international visitors, will drive migration to this corner of the country and keeps our market on sound financial footing.

Sorry, bubble-blowers, there just isn’t one here to burst.

 

  • Roger

    Tim,

    Thanks for the info on your blog. I have been reading your posts and was amazed to see that the average and median prices have jumped so high in the last two months. An average of price of 624K is one of the highest in the country!!

    This is good for sellers but unfortunate for buyers like me. I had planned on retiring in Victoria but these recent price jumps have forced me to rethink my plans. I canceled my airplane tickets for our March house hunting trip and will have to look elsewhere. Perhaps I might keep my present house and buy a winter home in California or Arizona. I think the winters there might be a little more mild. They may have less rain as well in the winter.

    Best of luck in 2008. I guess the higher the prices go the more commission you make and that is good for real estate agents.

  • Thanks for your comment, Roger.

    While the average and median prices are a decent indicator of market prices, they do not necessarily mean that Victoria and surrounding areas are out of reach. One has to remember that we do live on an island, surrounded by some of the most beautiful coastline in the world. Many properties that are bought and sold each month will be waterfront or close to it, which tends to push the prices up considerably. As an example, a whole island was sold on the MLS® last month for $7 million. This will most certainly skew the average and even the median somewhat higher.

    There are plenty of properties available that won’t break the bank and that many Canadians in market areas which are also enjoying favourable prices would be able to afford upon the successful sale of their houses.

    If you’re retiring, you should consider areas such as Sooke, which is only 45 minutes from Victoria. Prices here are in many cases $150-200,000 cheaper than in Victoria for comparable properties.

    There are still good deals to be found. It often takes the right agent. Feel free to contact me at 250-642-6361 and I’ll be happy to answer all your questions and perhaps cause you to reconsider your plans to go to Arizona!

  • Jebby

    How much longer will Victoria last in the world market though? Sure it’s an amazing place but the people living here already know that. Selling grossly inflated real-estate and the over-development that is happening now are ‘NOT’ going to fly when locals are the only buyers. The American market is plunging, the UK market too. Current owners will likely sell and new potential buyers will likely stay where they are. I could understand the prices if Victoria was a profitable place for employment but it’s really not.

  • Hi Jebby,

    Thanks for your comment on my blog. It’s true, things are changing in the local market. Lots more listings, fewer sales as our market becomes more “normal.”

    Contrary to some peoples’ beliefs, our market is made up of mostly in-town buyers moving within the region, followed by other Islanders, B.C. residents, and finally, from outside our province. Less than two per cent of last year’s transactions came from areas such as Alberta and the United States.

    It’s my belief that our market is still underpinned by a robust and diversifying economy (tech outdid tourism last year, for example), combined with a nice lifestyle and climate (although not recently!). Low interest rates should keep our market stable, but I am not expecting 2008 or 2009 to be record years. Nor can you expect to see rapid price increases as in the past few years.

    If one sector was to be particularly vulnerable, I would say it would have to be the condo market. There are lots of new condos out there and plenty more that are under construction. We’ll have to see what pans out.

    All that being said, it’s still common for a well-priced property to sell quickly and sometimes for above its asking price. The difference you’re going to find is how the property is marketed (i.e. photos, advertising, web efforts) and how the property is prepared for sale. Sellers are going to have to do more than slap a fresh coat of paint or crappy laminate floors down to effect a sale.

    Thanks again for your comment, and I hope you visit my blog again soon. My other blog, at http://blog.timayres.ca, is updated more frequently.

  • Well “the Black Swan” has just flown in. All the Bell Curve theorist, Economist, self serving realtors, not all of them, now have egg on their faces. “It is better to remain silent and be thought a fool that to speak and remove all doubt.” Especially on topics that you are not qualified to comment on.

    • Thanks for your response. I’m not quite sure what you’re referring to with your comments, but at any rate, this is an old post that was written about a year ago. Conditions have changed dramatically since then, I think you’ll find that early-2008 predictions made by “experts” from all fields have most likely been proven false.

      Thanks for reading and participating in the discussion.