Residential real-estate sales in the Capital Region drew record prices in March despite a COVID-19-related demand drop-off in the second half of the month.
MLS-listed single-family-dwellings in Greater Victoria claimed a record-breaking average price of $986,602 last month, surpassing the previous record of $953,190 set in January of this year. The median, or midpoint price of all sales, hit a record high of $845,000, eclipsing the previous record of $829,000.
Average prices for condominiums landed just shy of $500,000 at $498,999 to set a new record for that housing category, although the median price for the month, at $438,700, could not surpass last month’s record-breaking median of $440,000. The previous average record was $496,077 set in February.
“The first half of March saw significant gains in valuation with multiple properties in Greater Victoria selling in the multi-million dollar range which helped push the average and median prices to new heights,” said Victoria REALTOR Marko Juras
. “While the second half of the month saw a significant reduction in sales activity, the month ended 5% below 2019’s 640 sales to land at 608 transactions.”
Although demand for real-estate has significantly waned due to COVID-19, Juras says the traditional demand and supply equation appears to be balancing out with a reduced desire for purchasing coinciding with a drop in available listings.
“We’re heading towards a stalemate scenario that will, essentially, see the market hit the pause button into the spring and possibly into the summer months,” Juras says. “Normally under a scenario where demand is reduced prices will fall, but with active listings declining alongside demand we’re not seeing much pressure from sellers to adjust their pricing expectations.”
Active listings in March fell to 2,252 from 2,435 in March of last year. New listings throughout the month dropped to 1,084 from 1,284 over the same period in 2019.
As for what to expect in April, Juras anticipates a near-halving of 2019’s sales.
“Going by what we observed in the second half of March, my sense is we’ll see approximately 40% fewer deals than the 696 we recorded last year. Prices, on the other hand, are expected to maintain their current levels as available inventory continues to under-supply demand.”
With self-isolation measures requiring individuals to socially distance and avoid contact with the general public, buying and selling a home has brought about challenges for all parties involved, but modern technology can help overcome many obstacles.
“Top-of-mind for real-estate professionals is the safety of all individuals involved in the buying and selling process,” Juras says. "And with that comes a greater reliance on technology to showcase a home, more coordination for viewing and inspecting a home, and delicately managing the expectations of buyers and sellers engaged in one of the biggest financial transactions of their lives in a climate of social-distancing.”
One of the challenges created by economic uncertainty stemming from recent job losses and business closures has been access to mortgages. Lenders have been inundated with deferral requests and refinancing applications by existing clients, leaving limited resources for new mortgage applications. However, the situation is improving, Juras says, as the lending environment equalizes and adapts to a new normal.
“Earlier in March we saw instances of difficulties for purchasers to access mortgage products from their lenders or through their brokers, but it looks like new federal mandates and a balancing of procedures by banking institutions are mitigating the challenges we saw only weeks earlier."
For the remainder of the season, Juras anticipates the low interest rate environment to continue to spur demand for real-estate despite the unprecedented changes to social conduct and business norms. And individuals with significant cash holdings may also be in a position to secure favourable deals in a time of uncertainty.
“If you have cash on hand and can present an offer free from most conditions, now is the time to put your best foot forward. Some sellers who need to sell would prefer to sell sooner rather than later, and if an aggressive offer makes sense, it’s likely to be accepted.” C
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