November’s real-estate transactions pushed past 2022’s market activity despite strong headwinds in the industry and pressures from high interest rates, according to the latest data from the Victoria Real-Estate Board.

 

A total of 394 sales were recorded in November via the Multiple Listings Service, ten above last November’s 384 total, albeit with lower medians and averages for single-family and condominium homes compared to October’s prices. Townhomes, however, saw a jump in both the median and the average compared to the previous month.

 

193 single-family homes sold in November, an identical figure to October. Last November, 182 houses sold. The average price paid was $1,217,853, a drop from October’s $1,259,028 and well below the 2023 running average of $1,289,052. The month’s median fell to $1,086,500, also a drop from October’s $1,125,000 and below the year’s running average of $1,150,000.

 

“The sense of urgency among buyers has waned considerably this fall, with buyers willing to walk away from deals and stall negotiations. The number of stalled deals is the highest I’ve seen in years,” says Victoria realtor, Marko Juras (see website).

 

“For example, if a buyer is set to pay $800,000, and the seller says they won’t budget from $820,000, there is no deal, and we’re seeing a lot more of these stalled negotiations now that prices have softened and demand eased,” Juras added. "Not that long ago, buyers would reach higher, to satisfy the demands of the seller."

 

Condominium sales reached 120 in November, compared to 141 in October. The average purchase price was $600,921 and a $522,500 median. October had a $616,545 average and a $540,000 median, while the annual running average for 2023 is $632,718 and $550,000 is the median.

 

Townhomes represented the market’s only value uplift in November, with 49 transactions (compared to 42 in October) at an $855,020 average and a median of $847,000. October saw $811,235 and $747,648, respectively. The annual running average is $809,583 at a $766,395 median.

 

As for interest rates, Juras notes the current federal bond yield is 3.5%, and historically five-year mortgage rates were set 1.5% higher. Given that today’s rates are approximately 6% and not 5%, downward rate pressure appears to be growing and rates are likely poised for a reduction in the first quarter of 2024.

 

“Mortgage rates are hovering at around 6%, much higher than the historic spread between federal government bond rates and five-year mortgage rates, and despite bond rates falling to 3.5%, mortgages haven’t budged, which could mean the banks are covering losses through prolonged higher interest rates during the slowest months for home sales, but are still poised to lower rates in Q1,” Juras said.

 

Active listings of homes for sale, meanwhile, reached an eight year high in November at 2,644 units, the highest of any November since 2,952 in 2015. The peak was 4,488 set in 2012. New listings totalled 885, 100 above last November’s 785, and the highest new listings for the month since 933 in 2007.

 

“With prices trending downwards, affordability is improving on the basis that inventory is slightly cheaper, interest rates aside. Once you factor in wage growth, which a considerable amount of unionized labour will see in 2024 and against in 2025, and the potential for lower rates in a few months, we could see renewed buyer demand in the first quarter and into spring of next year,” Juras said.

 

As former AirBnB units begin to hit the market, Juras says approximately 40 condominiums were listed for sale in the downtown core in AirBnB-grandfathered buildings following the province’s announcement ending non-primary residence rentals for short-term stays, by May. Three of the 40 units have sold, according to Juras.

 

Of November’s 394 sales, 20 were commercial buys, and 12 were manufactured homes. C

 

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