Annual sales of single-family homes in 2018 totalled 4,543, a 19 per cent drop from 2017. However, this reduction reflects the market returning to more normal levels after the robust housing markets witnessed in 2016 and 2017.
Government policy-side measures introduced to cool the market, such as the mortgage stress test (Guideline B-20), eroded the purchasing power of some prospective home buyers by as much as 20 per cent. Despite lower demand, however, year-over-year benchmark prices of single-family homes continue to rise board-wide, up 10 per cent from December 2017.
As I work with Realtors® in the Vancouver market many are noticing that positive factors like price growth and consumer confidence have caused prospective homebuyers to rethink the avoidance of the market. Some of the experts feel that people who do not start now (investing) will look back in 10 years and kick themselves because of record low-interest rates as well as the shifting baby boomer segment of the market.
Housing Market in 2018 Performed as Expected in our area with single-family home sales in December dropping by around 48 per cent from one year ago and were 44 per cent lower than in November. Last month, 170 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 304 in November and 328 one year ago.
Inventory of single-family homes last month rose by 23 per cent from one year ago (941 to 761) but dipped by 12 per cent from November 2018. Active listings of apartments rose by 20 per cent (225 to 270) year over year and townhouses by 59 per cent (93 to 148).
Price increases in individual markets ranged from seven per cent in Nanaimo to 20 per cent in Port Alberni. Small month-over-month price reductions from November to December were posted in Duncan, Nanaimo, and Port Alberni. The year-over-year benchmark prices of apartments and townhouses board-wide increased by 12 and 13 per cent, respectively. Decreased demand and additional inventory are helping VIREB’s long-running sellers’ market transition to one that is balanced or near-balanced. However, “micro markets” are omnipresent in many communities, favouring sellers for moderately priced properties and benefitting buyers for higher-end homes.
We notice that property assessments, which were recently issued, can complicate the pricing process for some sellers who may not realize that the assessed figure is based on the previous year and does not reflect a home’s current value. The job of the Realtor® is to determine how this is reflected in relationship to each home.
The benchmark price of a single-family home board-wide was $506,300 in December, a 10 per cent increase from one year ago. (Benchmark pricing tracks the value of a typical home in the reported area.) Nanaimo’s benchmark price rose seven per cent to $538,300 but dropped by two per cent from November. The Parksville-Qualicum area saw its benchmark price increase by 11 per cent to $580,500.
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