The first year of the new decade started with a bang as January home sales throughout the Capital Region set a new monthly price record.
Single-family-dwellings on southern Vancouver Island sold for an average of $953,190, beating out November 2019’s record of $938,170 for the highest monthly average.
“We’ve had a very strong start to the year as total sales pushed well north of last January’s purchases, and this activity came with a record-breaking average monthly price for single-family-homes,” said Marko Juras, REALTOR® with Victoria-based Fair Realty.
Although average prices can fluctuate from month-to-month, January’s performance – coupled with a 25% increase in sales activity that saw transactions rise to 411 from January 2019’s 329 – suggests 2020 has the makings of being an above-average year for the local real-estate market.
“We were not expecting to see a drop in available inventory compared to last January, but available purchase opportunities fell by 5% to 1,958 listings. This is not a large reduction, but it is enough to remind us of a period when we had critically low inventory rates a couple of years ago that saw inventory in the 1,500 range,” Juras said, adding that “a low inventory environment with listings hovering in the 2,000 range when ideally they would be in the 3,500 range will most certainly put upwards pressure on valuations.”
The take-away from January’s sales activity is the market showed a strong response to competitively priced, relatively affordable inventory attainable to local workers. Listings at the top end of the market, priced from $1.5 million and higher, remained in a holding pattern while homes priced below $1 million in the urban core and under $800,000 on the West Shore drew sales.
“When you look at what’s hot in our market, it is single-family-homes listed below $1 million. And especially homes in the $600,000 to $800,000 range that are still affordable to local families earning local incomes, and within that price range is where we anticipate to see much of the sales activity occur this year,” said Juras.
As for the West Shore, Juras says the stress test has had an impact on home values in Langford, Colwood and Sooke as purchasers that traditionally qualified for higher mortgages were throttled back by federal affordability measures.
"Consider that two years ago you could buy a larger condo in downtown Langford for $330,000. Today the going rate is well north of $400,000 as purchasers locked out of downtown Victoria and the periphery look to the West Shore for purchase opportunities.”
“Fundamentally, people need a place to live,” Juras says. “Local buyers have moved beyond talking about Victoria being an expensive place to buy a home and instead are focusing on making it happen. This is what we’re seeing now with buyers determined to get in to the market and the location of their home appears to be of less importance than eligibility for a mortgage.” C