Last month, the total number of home sales in Greater Victoria fell to 510 from 835 in July last year.
High interest rates, inflation pressure and a dose of buyer exhaustion have slowed what was a hot real estate market in Victoria and turned it into a more user-friendly experience, the head of the Estates Victoria said.
Citing new sales information released Tuesday showing just 510 real estate sales across the region, Karen Denny Smith said the slowdown in the market translates into “a calmer, friendlier environment with decision time.”
Last month, the total number of sales fell to 510 from 835 in July last year. While it represents a significant decline, the average number of sales in July over the past five years before the pandemic was 743.
Probably the biggest factor, said Denny Smith, is interest rates.
“If you had a small jump, it wouldn’t make a huge difference, but when we’ve seen the increased jumps that we’ve seen over the past few months, obviously that has an impact on the market,” she said.
The result is that buyers have some time to find the right home and more to choose from, two things they haven’t had over the past couple of years.
There were 2,162 active sales listings at the end of July, an increase of 70 percent from 1,270 active sales listings at the end of July 2021.
Dinnie-Smyth expects to see a quieter, calmer market for the rest of this year.
“And that is good for everyone. It gives everyone time to breathe and think about what is happening, where they want to be and how they can enter the market,” she said, adding that the market is more than just numbers.
“Values will rise and fall over time, and local property values have historically increased slowly over time, which means that despite month-to-month differences, if you’re buying a home, you have a sound, long-term investment,” she said. . “We have to remember that people don’t buy or sell on a monthly basis.”
Looking at it this way, she said, as a long-term investment for the family, it’s still a good market for buyers and sellers.
Sales prices seem to indicate that sellers don’t do much harm.
The region’s record single-family home sale price in July fell to $1.28 million, down from $1.3 million in June, but still well above $1.06 million in July last year.
Residential unit prices in the region also maintained their value, with the record selling price last month reaching $628,100 in the region, down from $630,100 in June, but well above the $501,000 set in July 2021.
Residential homes are an exception, with the area’s record selling price rising last month to $852,600, compared to $850,300 in June and $684,300 last July.
“But everyone has the luxury of time now to think about what they’re buying and what they’re selling,” she said.
Denny Smith notes that the slowdown is really noted for homes around $1 million, but in the $1.5 million range, things are staying fairly flat.
“It’s been slower, but it’s not as dramatic as we’ve seen in this kind of the million-and-below range,” she said.
Dinnie-Smyth said that while sales activity may subside, there is no reason to take the supply side a breather, as it now has a chance to make up some ground.
“What we need is to continue to deal with supply constraints,” she said, because while the market may be stable, it will heat up again and housing stock will be pressured as it has in the past several years. “We know it’s going to swing again and again and if the supply goes down again, we’re back to the same situation we were in before.”
The rest of the island also saw more inventory last month.
The Vancouver Island Real Estate Board said buyers outside Malahat have more to choose from as the number of single-family homes for sale increased 142 percent to 1,387 compared to last year, while the number of available apartments increased 91 percent to 336 and homes jumped 107 in cent to 267.
The pace is more reminiscent of a typical summer market, said Kelly O’Dwyer, chair of the board.
“While higher interest rates are certainly affecting the market, some buyers are delaying their home purchases and plan to reconsider the process in the fall,” O’Dwyer said. “The pandemic has delivered a wrench in the real estate market, but what we’re seeing now feels like a normal summer.”
Last month, the island saw 297 single-family home sales, down 34 percent from a year ago, while apartment sales fell 37 percent, and condominium sales fell 49 percent over the same time.
Prices are still strong, despite the record sale price being down 1 percent compared to June of this year.
But compared to a year ago at this time, sale prices have made leaps and bounds, with the record price for a single-family home hitting $856.700 in July, up 22 percent from a year ago. The standard apartment price rose 26 percent to $450,200 in the past month, and the sale price of a cottage increased 23 percent to $624,700.