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Start of Victoria's 2022 spring buying season sets $1.426M house price record amid historic inventory lows

Residential towers in downtown Victoria are redefining the city's skyline as demand for real-estate on southern Vancouver Island continues to surge.  Citified.ca

Start of Victoria's 2022 spring buying season sets $1.426M house price record amid historic inventory lows
MIKE KOZAKOWSKI, CITIFIED.CA
The start of the spring buying season delivered a new record average and median price for single-family-homes throughout the Capital, amid the lowest active inventory levels ever seen for the month of March.
 
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Victoria Real-Estate Board data shows houses sold on the re-sale market via the Multiple Listings Service at an average of $1,426,628 in March, an increase of 1% above the former record set in January of this year and repeated in February at $1.410 million. The median, or an exact half-way point of all sales (which totalled 412 transactions) was a record-setting $1.31 million that eclipsed the former record of $1.28 million from February.
 
Marko Juras, a Victoria-based realtor, says that upwards price pressure continues to be exerted on highly desirable single-family-dwelling listings due to their relative rarity on the market, and as inflation impacts savings while mortgage rates start an upwards trajectory, the pressure to buy is on.
 
“Although we are seeing a slow-down from the levels of rapid price appreciation of 2020 and 2021 across the most desirable market segments, demand is still very, very strong for south Island homes as so few properties are on the market,” Juras said. "And given what's happening in the broader economic sense, if you can afford to buy a home today, chances are you will be actively pursuing a purchase and willing to reach to make it happen."
 
The lowest rate of active listings in March since record-keeping began some 26-years-ago delivered only 1,063 properties for all market segments (321 were non-residential). By comparison, in 2012 nearly 4,300 properties were on the market (3,400 as re-sale homes). In 1996 when record-keeping began, 3,444 residential properties were available for purchase with an additional 796 as non-residential listings.
 
“When you consider how limited the buying opportunities are, and with approximately one-third of all purchasers not adding inventory back into the market whether as first-time buyers or buyers arriving from other jurisdictions, we can see just how stressed the supply is and how that imbalance relative to demand maintains or fuels growth in prices just as inflation is quickly chipping away at savings,” Juras added.
 
Market demand for condominiums, meanwhile, varied by unit type in March, Juras said. Two-bed, two-bath layouts saw bidding wars in light of their more spacious interiors. Smaller listings held on to market momentum, but overall the average price of MLS sales for the segment fell slightly to $672,283 from February’s $678,862 average. The record high point was set in January at $683,759. March had the strongest sales numbers at 279 since September’s 306 purchases.
 
Townhome sales reached 85-units (five more than in February) at an average of $864,158. January and February saw averages of $872,661 and $926,157, respectively.
 
Total market-wide sales for March reached 833, a figure well above prior years outside of 2021’s 1,173 sales and 2016’s 1,121.
 
“As our market reaches its traditional high point in April, May and June but in tandem with interest rate increases and other macro factors that are showing signs of impacting the market, we are likely to see fewer listings priced below value with the expectation a bidding war may take over, and in turn more realistic prices that exhibit the true sentiment of the seller,” Juras says. “The appetite for perhaps blindly exceeding asking prices by significant amounts is waning, given the high cost of real-estate already, and in response sellers will be more realistic with their asks.”
 
The realtor says over the last year 70% of listings sold above-asking, and his interpretation of market sentiment has the ratio winding down to 20% of listings that given their location, design or desirability will appeal to a larger pool of purchasers in a still highly competitive market.
 
Regarding values, Juras feels the region is due for a pricing plateau, and that plateau appears to be taking shape in the current range of $1.4 million for single-family-homes, approximately $850,000 to $900,000 for townhomes, and around $650,000 to $700,000 for condominiums. Given the record-high demand, and record-low rates of re-sale inventory, Juras believes the likelihood of a significant downturn in valuations is low. C
 
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