Market Minute

Happy New Year

January 2nd, 2018


For the Comox Valley and Campbell River, the year ended pointing to gains in the single-family average price of 19% and 18% respectively.  Dollar sales volumes were up, but the number of units sold was down; partly as a result of higher prices, but also because of low inventory levels. In the November Edition of the Market Minute, we highlighted the factors which are driving the perfect storm in the real estate markets; strong demand and over restricted supply. The new mortgage regulations might not noticeably diminish demand, and may only serve to put some at a further disadvantage in the qualification process.

An article, which appeared last month in My Comox Valley Now, introduced a motion which, in part, sought to address the affordability issue in the over heated rental market. Mayor Jangula and Councillor Theos were defeated in the motion. We fully support Mayor Jangula in this initiative. The matter of affordability needs to be addressed in the rental sector, and across the development application process.  Affordability may be difficult to achieve with average Comox Valley lot price at $241,741 up 35% from this time last year.


Great Time to List…

December 2nd, 2017


The statistics indicate that for both the Comox Valley and Campbell River the number of units sold is down compared to last year. However, average prices are up 19% and 18% respectively and inventory levels are low. Two years ago there were 257 single family dwellings for sale in the Comox Valley, and now there are 170. In Campbell River there are 89 houses for sale at this time.

Last month we highlighted the ‘the perfect storm’ whereby supply is tight and there is aggressive demand. The government is taking some steps to tinker with the demand side. In our view much could be accomplished on the supply side by simply getting out of the way.


Do You Want Chow Mein With That?

November 1st, 2017


It is said that humility is a good thing.  Most in the real estate appraisal business can attest to the occasional humbling experience over the past two years, as we struggle to make sense of the most dynamic market most of us have ever known.

 

Readers will know that we have been banging on about the supply side for some time. Strangled supply and over zealous regulatory regimes, I maintain are a big part of the problem.

 

Attached below are two links from Josh Gordon PhD, Assistant Professor at the School of Public Policy at SFU, which speak to the demand side. Government has been very slow to collect data on foreign ownership since Mark Carney, the then Governor of the Bank of Canada, warned of the effects in 2011. To some extent, we still don’t really know what we are dealing with.

 

One study found that over 90% of ‘foreign buying’ was from China.  More recently, the chief economist at CIBC estimated that over 35% of the Vancouver market was ‘foreign money’. We recently highlighted that over 30% of the buyers of Comox Valley properties come from the Lower Mainland.

 

Is this a ‘bubble’, or the new reality?

 

In my opinion, it is unlikely that Government will move to effectively address the issue on the demand side. Surging prices have far outstripped local income gains.  Perhaps the supply side of the equation cannot entirely solve the affordability problem, but the issue needs to be re-addressed.  Most planning policy, and associated regulations such as OCP’s, zoning bylaws and Regional Growth Strategies were written well before this new reality

 

Housing Price Lunacy Moves East

Vancouver’s Housing Affordability Crisis

 

 


The Water Front Market, Is It Worth It?

October 2nd, 2017


Every market sector has its own characteristics. Water front property is no exception. Owning water front property is prestigious, making it sought after for those who can afford it. But is it worth it?

Sales of water front houses in the Comox Valley over the past 12 months have declined 27% from $44 million last year to $32 million this year. However, the average price has increased 19% from $638,812 to $762,079.

Sales of water front houses in Campbell River over the past 12 months have declined 11% from $10.3 million last year to $9.2 million this year. However, the average price has increased 40% from $543,979 to $762,500.

Currently, the average price of a non-waterfront house has increased 20% in the Comox Valley and 17% in Campbell River. It appears that the price increase for water front houses is out performing its non-waterfront counterpart!


Tanned and Healthy Looking… Why Thank You!

September 1st, 2017


It is September, and where did the summer go?  For many in the real estate industry, the pace has been torrid. For every story I hear of a price reduction, there are two opportunities to have a wrestling match in a multiple offer situation. Oh Joy!

A broad overview of a few of the lead indicators suggests that it has been a good Summer in the Comox Valley and in Campbell River.  Average single-family house prices are up 18% and 16% respectively.  Apartment condos prices are up 19% and 27%.

We have highlighted concerns about low inventory levels and, partly as a result, the Days to Sell for the Comox Valley stands at 26 days, and 28 days for Campbell River. If you list your property, you better be ready to start packing.

In my view, The Village of Cumberland is poised to do an ‘end run’. The sale of the ‘Trilogy Lands’ (+/- 750 acres at or close to the highway interchange) has closed. The Village has another ace up its sleeve, with hundreds of acres within the municipality for ongoing residential development. The main drag is vibrant, and I hear the pizza at Riders is awesome.


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