I’ve said it before and I’ll say it again. There’s no such thing as a price plateau in a hot market. Monthly medians (let alone averages) are notoriously variable and will go up and down depending on the sales mix. Due to that randomness sometimes you can get an extended period where prices look flat in a hot market or other periods where the overall trend seems to be contrary to market conditions.
This months stats have shown that to be true, with bigly jumps in both the single family median (up $15,000) and the average (up almost $80,000 to a record $852,590).
What matters is the trend, and calculating that over 12 months is a great way to take out any influences of seasonality which could confuse. Months of inventory for the trailing year is still going down, continuing a record 3.5 year run of steady declines. So far it has dropped by 78% from the high in May 2013.
At least the sales to new listings ratio has finally flatlined at 80% which seems to be the maximum that can be sustained for the year. Sales to new list is a good early indicator of where the market is going by measuring how many properties are selling relative to how many are listed. Again it is highly seasonal with only the yearly average telling the story on whether the market is heating up or cooling down.
Market conditions are now very similar to what they were in November 2003, with almost identical inventory and sales.
Why the continued insanity? The VREB figures it is due to “our current positive economic conditions, baby boomers retiring here, millennial buying cycles, a low Canadian dollar” which is likely not a bad guess. Although I would say the explanation is simpler than that: When affordability improves people buy until affordability deteriorates again. And although prices are rising quickly, affordability is still considerably better than it was in 2007 (when this blog was founded by the way).
Of course the jump in foreign buyers has also been a factor although that data is a month behind. The jump in October to 63 from 39 the month before was significant to pushing that month into record territory.
Compared to the VREB’s data that indicated only 2% of Victoria buyers were from outside Canada in 2015, that’s quite the big jump. Either VREB’s data was incorrect or we are seeing a big increase this year. If we see 2 or 3 more months of these elevated levels of foreign investment I’m certain that the province will extend the tax to Victoria as well in time for the election. Let’s not make the same mistake that Vancouver did and wait until the horse has left the barn. With 75.6 million dollars in foreign involved transactions in October, that is a big chunk of change to be taxed.
Update: Want to help bring the tax here? Email Christy Clark at firstname.lastname@example.org or your local MLA which are:
Oak Bay – Andrew Weaver – email@example.com
Victoria Beacon Hill – Carole James – Carole.James.firstname.lastname@example.org
Esquimalt Royal Roads – Maurine Karagianis – email@example.com
Victoria Swan Lake – Rob Fleming – firstname.lastname@example.org
Saanich South – Lana Popham – lana.popham.MLA@leg.bc.ca
Saanich North and the Islands – Gary Holman – email@example.com
Juan de Fuca – John Horgan – firstname.lastname@example.org
Feel free to use any of the data or graphs from this site to support your point.
Also good news: I’ve received a guest post from CuriousCat and another reader is preparing one as well. Will be published shortly as a break from the endless stats. Thanks! The community is what makes this site fun.