Greater Victoria Real Estate Spring Outlook
If you have read my blogs over the last few years you would see that the Victoria Real Estate market was undervalued and ready for a significant market upturn. However, no one could have predicted the rapid ascent that has transpired over the last 60 days. Interest rates for mortgages are still very low. The inventory of homes for sale is significantly lower than a year ago. The average monthly sales are approaching record highs over the last 3 months. These three factors alone would lead to an increase in market activity and prices. However, there are new factors that are also contributing to this historic rise in prices. One is a low dollar, which attracts out of country buyers, but the other one is a new variable. That being, long term Vancouver residents that have decided that now is the time to sell their high priced home in Vancouver, and they are choosing Victoria as one of their main cities to move to. Victoria is now a prime destination for Vancouver residents who have basically won the lottery by obtaining extremely high prices for their homes and are now cashing in and leaving the big city and moving to Victoria. The result of this sudden increase of lower Mainland buyers combined with an increase in foreign buyers from the US and overseas, plus buyers from across Canada, has created the perfect storm of rapid increased pricing in the majority of the Greater Victoria region.
The most desired locations for the lower mainland buyers appears to be Oak Bay, Saanich East and Fairfield areas. Some open houses are getting 100 to 200 people through, and then receiving multiple offers on these properties, and the resulting selling price is anywhere from $50,000 to $200,000 above the list price. Some starter homes in Oak Bay and Fairfield that were listed in the $600,000’s in February have been selling in the $800,000 to $900,000 range in the last few weeks. The overall price averages have shown an upturn of about 10% this year already, and I have seen increases upwards of 20% for a lot of these hot market locations over the last couple of months. As a result, we are now seeing price increases spreading out to all regions of the Greater Victoria area. Never in my 25 years as a realtor have I experienced this kind of market frenzy.
The next few months seem to be poised for the same amount of heightened market activity, as there appears to be no shortage of buyers. The listing inventory is shrinking, with only about 2600 available residences for sale today compared to about 4000 a year ago. The April 2016 sales numbers are predicted to hit around 1200 compared to 840 for April in 2015. Simply put, supply and demand factors alone show why prices are rising rapidly. It is going to be very interesting to see where this ends up over the course of 2016.
In the meantime, if you are seller, you are in a great place. If you are a buyer, then it will definitely be more challenging. The majority of homes are selling with multiple buyer interest, so you need to have all of your ducks in a row, and be prepared to go in above the list price if necessary. Additionally you will need to have as few subjects as possible on your offer. I am not a fan of subject free offers, especially when the buyer has not had a chance to obtain a building inspection. This can be very risky with a lot of homes. So be careful out there, and enjoy the ride, as it will not last forever. Nothing does. What goes up always comes down and without crystal balls no one knows when that will happen. This up cycle duration is going to be tough to predict.
Here are a few links to various real estate sources that may be of interest to you:
1. Up-to-date real estate information on my Facebook page: VictoriaBCProperties
2. Latest Website Newsletter: Newsletter
3. Latest historical statistics from the Victoria Real Estate Board: VREBStatistics
4. Search for Victoria Properties at my website: DaleSheppard.com
All the best to you and your family.
Sincerely, Dale
