Victoria's February housing market roared with surge in buying, higher prices
Mike Kozakowski, Citified.ca
Published March 1, 2023
Homebuyers holding out for discounted south Island real-estate were in for a surprise in February as demand pushed property sales well above expectations, and grabbed all but one price category along for the ride.
Victoria property sales surged in February to deliver 460 transactions via the Multiple Listings Service, according to Victoria Real-Estate Board data.
Market activity was so strong in February that it outpaced each of the last three months plus September, when 410 sales were recorded via the MLS, while 384 purchases were made in November, 320 in December and 278 in January. October eclipsed February by only 20 sales.
Active listings reached 1,809-units, which remains a significantly depressed inventory volume compared to longer-term averages pushing 4,000-units.
By the numbers, 220 single-family-home sales on MLS saw an average price of $1,272,933 surpass averages for the last five months, to land just below August’s figure of $1.274 million. The all-time high average price point in Victoria was set in April of 2022 at $1,432,298.
February’s single-family median rose to $1.1 million from $1.065 million in January, and also surpassed the medians dipping all the way back to July (with June's median at $1,178,250).
However, Victoria realtor Marko Juras says that February’s numbers may be noteworthy within the context of last fall and the start to 2023, but he cautions that February's peculiar home stretch could suggest March buying and selling may fall below expectations.
“Market behaviour did not deliver as busy of a second half to the month as we would have expected based on how February began, which could mean that macro trends nationally gave more buyers pause, and discouraged sellers out of a concern that they may not be able to afford a ladder climb after the sale of their property,” Juras said, adding that “with this in mind, we must still be careful not to confuse slow sales with waning demand or expect falling prices because sales are slow, primarily because today’s low MLS inventory rates change the dynamic that typically leads to a devaluation, and in fact, the low inventory is a stabilizer when sales stagnate.”
Condominiums, meanwhile, saw a further slide in their average metric based on 161 regional MLS sales, settling at $579,025, although the median rose to $547,000 from January’s $530,000. The average that month was $606,681, fuelled by the sale of several high-end suites. February’s condominium average was the only data point to show a decline compared to both December and January.
“The condominium market segment is proving to be a challenge for potential sellers, who may be able to quickly sell a unit, but are only able to move laterally in the market due to higher interest rates or personal finances,” Juras said. “We see more and more scenarios of condo homeowners feeling stuck, for lack of a better term, and we also see investors that could sell into this market continuing to hang on to their asset in light of the high rental rates they are able to secure. Both of these scenarios decrease availability, and have a plateau effect on values.”
Townhome purchases were arguably the biggest story of the month, with an average cost sharply accelerating from $662,338 in January to $788,113 across 45 MLS sales. The median jumped by $124,000 to $744,000. The average and median in February were higher than December’s totals, too.
Remaining activity was split between 24 commercial transactions and 10 mobile home sales.
Another component to Victoria’s housing market is the high-pressure buying scenario, that typically occurs if a listing garners interest primarily on price point, putting it into the crosshairs of a bidding war, which, Juras says, still happens at a sales frequency of 10 to 15%.
“Even now, you can utilize a low inventory listing strategy by pricing a home below what its fair market value is, and it will absolutely garner multiple bids, provided there are no hidden problems,” Juras said. “Few listings allow this tactic to work, but you wouldn’t want to try it if listings are on a sharp incline as you could feed into a trend of waning prices amid growing supply.”
Overall market sentiment, Juras believes, is much like what the realtor had forecasted several months ago. Buyers are adapting to a new normal and reconfiguring their finances to work within the reality of strong demand for Victoria real-estate, and the placating effect of low inventory on a market otherwise contending with headwinds.
“The key theme today is the lack of inventory, that’s at the core of what we’re seeing,” Juras said. “As long as sellers refrain from selling, and buyers continue to view Victoria as a desirable place to move to and buy real-estate in, we can reasonably anticipate for prices to stay buoyant even at today’s higher interest rates." C
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