Hard To Choose With So Much To Choose From

Buyers are having a hard time these days figuring out which home they want to buy. With so many homes for sale I am finding many buyers are torn between a number of properties and going back and forth between them. This is a great place for the buyer to be in, but causes a little confusion with our local sellers who are accustomed to being highly sought after. Lately I have been spending a great amount of time negotiating offers, and in that I have noticed that the most successful negotiations have been where the seller does not get frustrated with the buyer who is un-sure. I feel it is very important for sellers to accommodate the buyers while they are making these tough decisions, and to encourage the buyers to look around so they feel more confident in the market and in their purchase.

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Sales Are Slow But Steady

Over the past few months we have seen slow but steady sales in the Victoria Real Estate Market (in the 400 sales per month range). In my travels around the city, and in the many Open Houses which I host and visit, I am seeing a good number of buyers looking around for a new home. I believe that today’s buyers are seeing traditional market forces take the lead. I see birth, downsizing, and job transfer as traditional market forces for Victoria. In these traditional sectors of the market, we find ourselves working with people who usually have a better understanding of our local real estate market. Over the past month I have seen the buyers and sellers come closer together in what they think property is worth. In September and October I had a large number of possible purchases which fell away due to sellers and buyers not seeing eye to eye. It has been a difficult Fall market for both sellers and buyers.

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Competition Bureau Vs CREA and REALTOR.ca®

CREA and the Competition Bureau have come to an agreement on what changes will be made to their rules which govern the use of REALTOR.ca®. For us here in Victoria I do not see there being any changes to the system we already have in place. All of the changes and regulations outlined in the agreement have been in effect here in Victoria for many years. I read the press release from CREA three times and saw nothing that with affect the way that the Victoria Real Estate Board governs it’s members. This seems incredible when you take into account the amount of media coverage on the story. Since Victoria is one of Canada’s most advanced local real estate boards in business practices, we have already dealt with these issues and have come to the same conclusion as CREA and the Commissioner. There is a multitude of different business models operating in Victoria and they have been in business for many years.

Aaron Hall.

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Less Listings Coming Onto The Market, Supply And Demand.

I have noticed over the past month that within our Brokerage (Royal LePage Coast Capital Realty) we have seen a dramatic decline in the number of new listings coming onto the market. To me this is a seasonal trend that is quite predictable here in Victoria BC. I am expecting the market to chug along at a predictably slow rate as it usually does at this time of year. We are seeing a lower than usual number of sales happening these days, so I have been asking the public what they think the reason is. The other day at an Open House a lady told me and Peter that she had already bought and so did everyone she knew that was going to buy. This was a good point! There are a finite number of buyers out there, and it is very possible that we have more homes for sale than there are buyers to buy them. We all know that our prices downtown are high and that if they were to lower we may attract more buyers to the downtown area. The thing is, the prices of non-luxury downtown real estate have not dropped below the prices seen earlier in this year (February), but the number of sales in the downtown area have been steady. Demand is a powerful market force and it is keeping prices quite stable for homeowners selling their downtown real estate. I work primarily with downtown real estate but this does not make me un-aware of the different things are happening outside of the core areas of our Capital Region.

Aaron.

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What Do You Do When The Market Is Slow, And When Is It Going To Pick Up?

I have many people talking about how I must have a lot of free time these days with the market being slow. For me this just does not seem to be the case.

Lately I have been spending a great amount of time answering questions and meeting with people to discuss what I am seeing on the front lines our local real estate market.

What I have been telling people is the in my world I really see consumer confidence as being the largest factor to the current slow-down. I am working with buyers and sellers, I did help 5 properties change hands in August but have struck out for Sept.

Where I see the greatest difficulty in our current market is in trying to negotiate price. Buyers and sellers are so far apart that it can take a great amount of time and effort to reach an agreement. One set of buyers I am working with now have been negotiating on a property for over 3 weeks, This is unusual.

The components to the Victoria Real Estate market are so many and so varied that even after working directly with many different buyers and seller over the past three months I can still see no clear picture as to where we are headed.

So far, I have not seen any considerable drops in values of homes that I have been working on. However, I have seen homes priced well over values from last year which have needed dramatic price reductions in order to sell, mind you these huge price reductions have only brought the sale prices back down to where they were at the beginning of this year.

There are a few areas of the market that have seen drops in value, and areas that have been affected by the HST but in large the average home that is desirable for one reason or another is selling at prices seen at the beginning of this year.

One important trend I would like to point out is that in my recent activities I have seen a large reduction in both first time buyers with High-Ratio Mortgages, and out of town buyers.

At the moment, the few people who I see buying real estate through me or the other Agents in my office are predominantly locals who are moving from one place to another.

Slow Sales Persisting On The Victoria Real Estate Board

Again this we are seeing very low numbers of homes selling on the Victoria Real Estate Board. I had a discussion with two Mortgage Broker friends of mine today about what may be causing such a dramatic decrease in volume. We talked about HST, new CMHC rules, and Consumer Confidence, we hear these terms often. We have no clear reasons as to why the numbers are so low, babies are still being born and people need to move. What gives? We did agree that across the board we are hearing “we are going to wait to see how things turn out” quite often from our friends and clients. This seems to put the onus on Consumer Confidence (just an opinion). The Local Market, sales where both parties already live here, seems to be slow but moving. The Emigration/Immigration Market seems to have dried up lately. I am not hearing a peep from the “out of town buyers” these days, this same thing happened at the onset of the recession. I feel that I am seeing a second and possibly deeper hit to our Real Estate Market from this Global Financial Crisis. Victoria is a stubborn and slow moving market, and we are typically behind the more volatile markets. Where this recent Slow-Down will take us no one knows. So far, in the bulk of the Downtown Market (family homes) we have not seen any noticeable drops in values, only in the Luxury Sector.

How Is The Low Number Of Recent Sales Affecting The Market?

Over the past four months we have seen a decline in the number of sold homes, and a general slow-down in our local Victoria Real Estate Market. I have seen some predictable things take place as a result of this slow-down. Before sellers became accustomed to this new style of market there was a bit of panic that spread through as sellers realized they were not guaranteed a timely sale. Many homes that are priced well, in good condition, and in good locations are not selling simply because there are more sellers than buyers. So far I have not seen any decline in prices over that of early this year, and we are seeing a 5% increase over last years prices. Sellers are increasingly careful with their pricing, but at the same time becoming less flexible on those prices. This is a tight market we are in these days, only time will tell where it will lead us.

The Market Is Slow But Still Moving

Lately we have seen a slowdown in the number of homes selling and inventory pilling up as a result. There are still sales happening at the same prices as we have seen all year but the volume of these sales has come down substantially (30% or so) to approx 500 per month. This is an unusually low amount of sales for Victoria. As the season moves on we may see more activity with buyers who feel comfortable investing the Victoria Real Estate Market return to the arena.