REALTORS® Fergus Kyne and Dirk VanderWal announced today the release of a new report to Victoria real estate market observers, in print and digital editions. The inaugural quarterly publication delivers exclusive analysis and a uniquely informed take on last quarter’s market movements, near- term direction, specific trends, and prescient opportunities for buyers, sellers, and investors.
“Providing this deeper level of insight is a great way for us to provide more value to our clients, and we saw merit in sharing our research more widely,” notes VanderWal, one of The Q Report’s co-authors. His partner in the endeavour, Kyne, elaborates, “The Q Report is an overview of what’s happening in Victoria real estate, but many of the metrics we use to see these bigger trends can be applied to analyze an individual’s particular circumstances. We are positioned to use this data to help people make good decisions.”
The Q Report’s content is comprehensive and wide-ranging, bringing together market performance, policy, finance, outlook, and more. The just-released report charts numerous sales metrics for single family, multi-family, and luxury property classes across the Core, Westshore, and Peninsula, and includes analysis and explanation. A price index ‘leaderboard’ maps which areas have seen the most significant gains in their MLS® Home Price Index® value, those that haven’t, and the reasons why. The current edition of the report also applies a seasonal adjustment algorithm to recent sales figures, teasing out a number of compelling data points from the last few market cycles, and bringing the reader right up to date with trends as of Q4 2018. Finally, the authors define the best opportunities for buyers, sellers, and investors, based on their outlook for Q1 2019.
The project was inspired by a recent business trip to New York City for education and networking with fellow Christie’s International Real Estate associates, where Kyne came across a Manhattan broker who shared a number of her illuminating observations on their high-end property market. The idea of a locally-focused, quarterly market report that stepped out past the standard statistics was born, fellow Newport Realty associate Dirk VanderWal quickly partnered on the project, and the pair got to work on writing.
Kyne continues, “The Q Report is going to be an industry-standard document for our marketplace. Looking ahead, consumers and industry practitioners are going to look this to make sense of what’s happening in real estate around Victoria. We are excited to see what it’s going to evolve into.”
Anyone who is interested in getting a copy of The Q Report should point their browser to victoriaqreport.com.
Fergus Kyne, PREC, and Dirk VanderWal are REALTORS® with Newport Realty Ltd. in Victoria, BC. Newport is a proudly independent local company, serving Victoria for over 40 years, which has grown to nearly one hundred agents with offices in Downtown and Sidney, and is the exclusive regional affiliate of Christie’s International Real Estate.
I have heard and overheard enough recent conversation around coffee houses, bars, social media, and of course real estate offices speculating about a price drop in Victoria’s real estate market that I thought it might be time to take a look at whether the data suggests that our real estate market is indeed in decline.
With the introduction of the B-20 stress test at the beginning of January, and several rounds of increases to mortgage lending rates starting last year, property buyers across Canada have seen their borrowing power (and hence their purchasing power) decrease significantly in 2018 - up to 20% in many cases. As the real estate and financial sectors widely predicted, the market has responded with what the media has widely termed a cool down. Voices from within BC’s real estate industry have tended to characterize the recent trends more as a ‘return to balance.’ In Victoria particularly I believe that assessment fits, as we have seen a levelling off, with significantly lower volume of home sales this year than we saw in the unprecedented activity of 2016-17, allowing inventory levels to build up a bit from where they were, and taking some of the acute pressure off the market.
But are house prices dropping in Victoria?
Take a look at the following two charts:
This first figure compares the average sale price (light blue line) with the number of sales (dark blue area), looking back over 5 years’ worth of market cycles to have a frame of reference. We can see that although volume is down significantly for 2018, the price trend is holding steadily up, keeping above the gains of the past two years and following the general trend line rather than reversing direction. One other note which I found interesting: this level of market volume for 2018 compares closely to 2014, where late 2013 had brought a bump in discounted 5-year fixed rates up to the mid-3% range, just a little under where current 5-year discounted rates sit.
The MLS® Home Price Index® is an amazing tool I use regularly in my practice. It makes plain sense out of a massive mountain of sales data. The composite index trend draws an even more explicit picture of the home price trend in the Victoria market area than VREB’s average sale price data over the same time period - a low-interest-rate-fuelled meteoric rise throughout 2016-17, indeed even into early 2018, with a flattening of that line since spring. By way of explanation on that spring point: bear in mind that every buyer with a 120 day rate hold was still able to apply and be approved under the ‘old rules’ (pre-B-20 stress test) as of December 2017, provided they purchased a property and closed on it before the end of April 2018.
So… definitely not a price drop in either chart. Transaction volume is down, and pricing has flattened, but is holding steady, and may even continue making incremental gains.
Of course, looking at a singular, large-scale view aggregated and averaged out to a single trend doesn’t tell the whole story. Within our market are in fact several smaller markets that sometimes seem to function independently of one another - condos, the luxury market (for the sake of convenience, let’s call that listings over $1m), and those ‘bread and butter’ family homes would be just a few examples. The latter and the former have tended to continue selling well throughout this year, and foreseeably will continue to do so, albeit without the frantic atmosphere and ubiquitous multiple offer presentations.
It’s those listings priced over $1m that have had a harder time moving this year. No surprise, really, considering the higher cost and difficulty in borrowing. Anecdotally, what I’m hearing is that most of these unsuccessful $1m+ sellers preferred to withdraw their listings than slash prices in order to effect a sale. This has come into sharp focus recently, as a number of purchase contracts in the market area have come undone when the prospective purchaser has been unable to complete due to their inability to sell their current property.
The real story here is there was a massive overall massive run-up in the number of higher-priced listings coming on the market in early 2018 in anticipation of seeing the upward pricing trend, low inventory, and high demand of the previous two years continue to extrapolate. Sadly, this significant increase in higher-priced listings was happening directly against those headwinds of tougher borrowing qualifications and higher interest rates. Note that the number of sales for homes over $1m has remained relatively consistent, but where the number of listings has been declining from late summer through fall of this year supports the notion that most of these listings are being taken off the market rather than selling - if they were selling, we would see the number of sales line turning upward to meet that listings line, increasing as the number of active listings declined.
Referring back to the MLS® HPI® benchmark value chart above, there have been instances In the course of the price flattening trend where the HPI® benchmark price shows a slight decrease month-to-month, which can read to consumers like “house prices are decreasing,” but we haven’t seen a single month yet which as posted a year-over-year loss. I personally suspect that what buzz there is in the marketplace about prices coming down is coming as a result of the news filtering in from neighbouring markets in Seattle and Vancouver, where real price declines are indeed underway. I’ve pointed out to a few local inquiries that both of those markets saw even steeper price gains than our own in the past few years - gains which pushed both markets well beyond the margin of affordability from an earnings/housing price perspective - and in turn gave those markets a wider margin for correction. The difference in Victoria is that although the opportunities are admittedly less than abundant, there is still enough product in our market at accessible price points to keep it moving. At this point, the numbers don’t tell me that a price drop has happened appreciably in Victoria in 2018. After the expected December/January slump, we will look for clues heading into the spring market, where if I had to guess, a relatively stable, balanced market awaits.
Why? As positive employment numbers continue to come in, and the Greater Victoria region continues to add new residents, the fundamentals of supply and demand suggest that housing isn’t going to fall off a cliff. Langford remains one of the fastest-growing cities in the country, with Victoria and Saanich each adding nearly equal numbers of residents year over year as well. Tighter financing is going to continue tempering housing demand somewhat, keeping us out of the red-hot selloff of 2016 and maintaining some level of listing inventory and a lower number of transactions than the past two years, but all those new faces are still going to need places to live. A steep incline in interest rates could further stall the market, but it would have to be significant to spur an appreciable price drop.
Do you agree? Disagree? Want to talk further about where the market’s heading and whether it’s the right time for YOU to make a move? Curious for a closer breakdown on your neighbourhood or property type? Send an email now, I’d love to start a conversation with you.
You're shopping for a new home. You drive to visit a recent listing. As you walk through the front doors, you're impressed. Every room looks fantastic. You see yourself relaxing on the spacious patio, cooking in the modern kitchen, and enjoying evenings with the family in the cozy living room.
Your emotions are on overdrive. This is your dream home!
Should you make an offer? Probably. In fact, you should make that decision quickly in case there are other interested buyers.
However, your decision shouldn't be guided purely by emotion. You want to make sure you take practical matters into consideration too.
For example, you'll want to consider:
Is the property within your price range?
Does it have everything you need?
Does the neighbourhood work for you?
How old is the property? Are there items, such as the furnace, that may need to be replaced soon?
Will it need any major repairs or upgrades?
What are the average monthly costs of carrying the home? (Property taxes, utilities, etc.)
Once you've considered the purchase of the home from a practical standpoint, you'll have a lot more confidence in your decision when you make an offer.
Want to talk to an expert who can make sure you're informed with a 360-degree view on any property? Get in touch today.
When you're having a garage sale, one of the toughest tasks is pricing your items. If you put a price tag on your old golf clubs that’s too high, no one will buy them. If you make the price too low, they might sell quickly, but you’ll spend the rest of the day wondering if you could have gotten more!
It's similar to selling your home — except with your home, the stakes are much higher. You want to price your property to sell, but you don’t want to leave any money on the table.
How do you accomplish that?
Setting the right list price for your home requires a combination of skilled calculation AND industry savvy.
Let's start with the "calculation" part...
When you work with me, I'll review recently sold properties that are similar to yours in type, size, features and location. Then, using that data, we’ll calculate a range that represents your property's "current market value."
For example, consider a spacious 15-year-old bungalow in a nice neighbourhood. If similar homes in the area have sold for $675,000- $750,000 in the last six months, then it's obvious that your home should sell in that range too. A list price above or below that range would be in the danger zone.
But skilled calculation is only half the task.
Setting your list price also requires expertise in the local market, combined with good old-fashioned gut instinct. That instinct comes from being on the front lines of many property transactions.
That's why working with a good real estate salesperson is so important, when you’re deciding on the list price for your home.
Ideally, you would like buyers to wait until they’ve viewed your whole property before they judge it. However, the reality is, buyers start forming an impression of your home as soon as they see it from the curb. So, it pays to do everything you can to improve your property's "curb appeal".
Here are some ideas:
You can improve the impact of your landscaping by trimming hedges, removing any unsightly weeds, and cutting the grass. Planting just a few fresh flowers can make a big impact.
If your main entrance door is old, a fresh coat of paint will make it look like new. In some cases, the effect is significant.
Remove any items that might distract the buyer from forming a good first impression. For example, garbage cans, stored items along the side of the property, etc.
Make sure the curtains and blinds on your front windows are open during viewings. That will make your home look more friendly and appealing.
If your driveway has grease stains and other blemishes, consider renting a power washer and giving the driveway a thorough cleaning.
Clean your front windows. If possible, also clean the exterior panes.
Finally, if possible, park your vehicles on the street and away from your home. Doing this will not only make your home look more inviting to buyers, it will give them a convenient place to park.
Most of these tips can be done in less than a day. Yet, they can make a big difference in your home's curb appeal. They are worth the effort!
Looking for any other tips on a successful, top-price sale of your home? Get in touch with me any time!
Committed to combining knowledge, trust, and technology to build a relationship and deliver a top-rate experience, helping you meet your real estate goals and build the life you want, right here in paradise.
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