Remember when the VREB was the real estate cheerleader? In the market doldrums of 2011 and 2012 they jumped on any positive glimmer in the stats and held it up as examples of the market not being quite so bad. Eventually even they could not keep up the positive spin, and market summaries were filled with somber warnings about sellers needing to “price appropriately” in this market in order to make the move.
Well it seems like their spirit has been permanently broken, because the March numbers were decidedly undersold as “Another busy month in the Victoria Real Estate Market”. Let’s take a look at just how busy this month was.
Monthly sales, at 1121 are both the highest we’ve ever seen in March, and the highest we’ve ever seen in any month in history. Only when we adjust for population does March 1991 outdo us by a smidge. Inventory is not as low as it was in 2004 and 2005 but you can see March inventory levels have fallen off a cliff in the last two years so we are not far off.
Looking at months of inventory, one of the better gauges of the market, we are now squarely in the same category as 2004 and 2005.
At that kind of market activity level, here is what we could expect based on past performance.
Sure enough, single family house prices have taken a huge jump, with the average sitting at $748,000 which is a massive jump over the previous record of $704,000. Of course that should be taken with a grain of salt given the average can be easily influenced by high end sales. However the median of $651,000 is also a record and a huge jump over the previous high of $606,000 just a month ago.
Condos continue to lag, up about 13% from the bottom in early 2013.
What’s causing the market insanity? The president of the VREB, Mike Nugent, gives a reasonable theory:
“Pent up demand from the slower years of 2008 to 2013, lower than historic mortgage rates, strong interest from out of town buyers, a buoyant economy that’s attracting job seekers and the lifestyle and beauty that Victoria and area offers all contribute to the activity we’ve seen this year.”
I was pretty skeptical about the foreign buyer theory a couple months ago, but given that out of town buyers have a proportionately greater effect on demand, and the increasing number of anecdotes on the street, I think they are a big part of the picture. Interestingly, we’ve had a large increase in visitors from Vancouver to the blog lately. In March:
In February, only 15% of visitors were from Vancouver. In January it was 9%. So if you’re reading this and you live in Vancouver, leave a comment and let us know what your interest is in the Victoria market. Have you come to invade our sleepy little hamlet with your fistfuls of cash? Or do you just come to appreciate the various squiggly lines I post?