The month of May has come and gone and Covid-19 has been relatively quiet from a Vancouver Island perspective the last few weeks. As restrictions were eased for B.C. and many businesses have re-opened their doors, it has brought a renewed sense of optimism from a social and economic perspective, which includes the local real estate market here in Victoria. For years now, Victoria has been a pipeline for migration from people across Canada and beyond, especially from the Lower Mainland. I would imagine that seeing how well Vancouver Island has handled the pandemic, those baby boomers and others are only more enticed to head west and retire or establish new roots on the Island. As the weather has been getting nicer and days getting longer, buyers and sellers have been emerging from a couple month hibernation period and real estate is once again on many people's minds. It shows with May sales volume seeing a 59% increase from April (457 total sales versus 287 in April 2020). May however, is typically the busiest month of the year for real estate sales volume and new listings coming on market and even with a surge since April, May volume was down 46% from May 2019, which had 848 sales. To offset the sales volume loss from last year, the amount of new listings has also seen dramatic drop since Covid, which has kept pressure on pricing because of reduced inventory levels. There are some early indications that inventory levels are slowly starting to increase as many sellers with plans on hold now look to make their move. June is certainly going to be an interesting month ahead and I am looking forward to helping clients navigate through the best I can.
There are so many variables at play in these turbulent times at all levels of society. Locally, Victoria is a city that relies heavily on it's tourism and service industry for jobs and business revenue. It is all but certain there will be next to no international tourism dollars this summer and with that will come very difficult times for countless businesses across the region. Tourism is a nearly $2 billion per year industry for Victoria with roughly 3 million tourists visiting the South Island per year! Hotels, Restaurants/Pubs, tour companies, flights, ferries, cruise ships, Airbnb's (there are roughly 3400 in the CRD), all of these industries are going to face significant challenges ahead and there will be a hard price to pay. These businesses and families that run the majority of them desperately need your help!
I am confident that Island residents and Canadians more than ever can truly understand the importance to buy and SHOP LOCAL to keep these struggling businesses afloat and do their part to contribute. When buying anything for the months ahead, please help support local businesses. I cannot stress that enough.
Back to real estate stats......
We saw 457 sales in May, 249 of which were single family and 88 of those in the Core area (Victoria, Saanich East and West, Oak Bay, Esquimalt, View Royal). Taking a deeper look at the 249 single family sales I can note that 206 sales were under $1M (63 in the Core), 108 under $750K (20 in the Core). There were 6 sales over $2M. There were 526 houses listed in May for a net inventory increase of 277 listings (526 listed - 249 sales). In the Core there was 214 listed (214 - 88 sales) to build inventory up 126 in the month. This shows that inventory of houses is increasing. The average sale price of single family homes was $860,567 and median price of $810,000 with average days on market of 43 but a median of 21 (the median shows what range the majority of the houses fall under for price or days on market). The average sale price in the Core was $991,871 with a median of $902,000 with average days on market of 31 and median of 15! This shows a much lower time on market for homes in the Core with the majority of homes selling in the $900,000 range. While the property assessment has no true bearing on the true market value of a home, the average sale price in the Core was 6% over assessed value and median was 5% over assessment. Houses with suites/mortgage helpers in place had 70 of the 249 sales but only 21 of those were under $800,000 and 6 of those in the Core. There has certainly been a faster moving pace of homes with mortgage helpers or ones in the lower level price points. Low inventory has kept pressure on these properties. At month end there was 1023 active single family homes for sale with 364 of those in the Core.
For the condo market, there were 110 sales with 345 listed for a net inventory increase of 245 properties, which is showing a higher proportion of inventory being added compared to single family. At month end there were 468 active condo listings. Of the 110 condos sold, 70 were in the Core. 10 sales were under $300,000, 49 between $300-400K, 20 between $400-500K, 22 between $500-750K and just two sales over $750K. Of condos sold in the Core, the average sale price was $452,666 and median price of $425,000 with average days on market of 35 and median days at 28. The average sale price over assessment in the Core was 7% with the median at 5%. Also of note, the average price per square foot of condos sold was $513/sqft with a median of $502/sqft. For new condos under $1M, the average list price was $758/sqft while the median list price was $732/sqft.
I expect inventory levels to slowly accumulate over the summer months giving buyers more options and slightly less competition. This could mark a shift to a more "balanced market" for the first time in a long time. Mortgage rates continue at low levels and I would expect rates to remain low for the foreseeable future. While Victoria has seen softening in the luxury markets for the last couple years with the introduction of the speculation tax and foreign buyers tax, the market for homes under $1M has remained competitive with low inventory levels throughout Covid. While it seems like inventory levels are increasing slightly, it will take a longer period of time for any benefits to be realized by buyers. Check back in for an update after the June market has completed!!
Mortgage rates have been remaining at low and competitive levels. Click for a link to Ratehub's current rates available