Market Minute

Sales Volumes… Off, Off, Off

December 3rd, 2018


In the month of November, for both the Comox Valley and Campbell River single family markets, the dollar volumes of sales were down 9% and 37% respectively.  For the year, the sales volume for the Comox Valley was virtually static compared to last year. In Campbell River, the reduced sales volume for November pushed the yearly total down 9% to $227 million. Compared to last year, lot sales are down 32% in the Comox Valley, and 31% in Campbell River. These statistics on lot sales may not provide an accurate reflection of the market, as private transactions are not included in the MLS statistics.  Many other market sectors show lower sales volumes; this is especially true in the acreage market sectors in the Comox Valley where improved acreage sales are off 39%, and unimproved acreage (raw land) sales are off 18%.

The Condominium market in the Comox Valley seems to be bucking this trend. Condos still provide a less expensive point of entry to the market. The 58% increase in the volume of townhouse sales is the result of good supply.  In Campbell River, sales volumes for patio homes and townhouses were down over the year, but inventory is virtually non-existent.


Correction?…What Correction!

November 2nd, 2018


For both of our markets, the statistics indicate that we are experiencing a cooling trend. For the month of October, the dollar volume of sales in the Comox Valley was down 32% to $27.7 million, while in Campbell River the sales volume was down 9% to $20.5 million. Inventory levels remain low, and this should keep prices quite firm. In the past month there has been good news of the LNG development in Northern British Columbia, and this could potentially attract workers living on Vancouver Island. Countering this positive news is the prospect for higher interest rates. Overall, based on the data available, the Comox Valley and Campbell River markets should experience a soft landing.


Real Value In A Changing Market

October 2nd, 2018


As the affordability of detached homes have decrease over the past two years, townhouses have become a realistic alternative to detached home ownership. For the cost, a townhouse provides more indoor and outdoor space with your own front door.

As of the end of September 2018, the average price of a detached home in the Comox Valley is $532,000 and Campbell River is $447,000. Compare that to the average price of a townhouse as of the end of September 2018; Comox Valley $341,000 and Campbell River $219,000.

The cost differential between detached homes and townhouses is putting upward pressure on the price of townhouses. In the Comox Valley reported sales dollars for townhouses have increased 71 percent from $38.8 million last year to $66.1 million this year. While in Campbell River reported sales dollars for townhouses have increased 8 percent from $9.1 million last year to $9.8 million this year. As housing is more affordable in Campbell River (the average price of detached homes is 19 percent less than the Comox Valley) there is less demand in the townhouse sector. That being said it is interesting to note that the increase in price of Townhouses over the past year was 16 percent in the Comox Valley and 15 percent in Campbell River. This increase has outpaced the detached housing market, which over the same time was 11 percent for the Comox Valley and 13 percent for Campbell River.

With a choice between all housing options, a townhouse is still an affordable middle ground and is being perceived as real value for your dollar in our changing market.

 


What To Do…

September 4th, 2018


Over the past three and a half years, we have witnessed some of the most aggressive market conditions, which many of us in the real estate business have ever experienced. Are there now signs that the market is at last, taking a breather? Or to put it another way, “If I have waited this long to get into the market, should I wait a little longer?”

There may be no simple answer to this question, but this is what we are seeing…

– There are two markets at play; below half a million dollars, and above half a million dollars. The market below half a million dollars remains much more aggressive.

– While we still see properties sell above the list price, there is some buyer push back. This is especially true on acreage properties ($723,240 – Average price in Comox Valley), but we are seeing this in other sectors, as well.  So, if you were waiting for a price reduction it may be interesting to note that in the Comox Valley, there were 74 price reductions in the last month. In Campbell River, there were 36 price reductions.

– The Vancouver market has slowed for a number of reasons, so it may take a few months for the change to manifest itself on the Vancouver Island markets.

– If there is a correction, it is our view that the Comox Valley and Campbell River should experience a soft landing.


Divide And Conquer

August 2nd, 2018


The sales to list ratio is the final sale price of a home to its list or asking price. The ratio is an indication of whether a home is selling above, at or below list price.

A home with a sale to list ratio greater than 100 percent means that the buyer paid more than the list price, while a sale to list ratio less than 100 percent means that the home sold for less than list price.

This ratio is a very useful metric not only for home sales but any situation where value is determined by negotiation between a buyer and seller. How far the ratio deviates from 100 percent and the direction of deviation provides insight into the motivation of the buyer and seller. As to the real estate market it is generally agreed that a ratio of 40 percent of less is a ‘Buyer’s Market’, 40 to 60 percent is a balanced market and over 60 percent is a ‘Seller’s Market’.

Over the past 12 months in the Comox Valley we saw a 78 percent sales to list ratio and in Campbell River the ratio for the same period was 87 percent, indicating that both the Comox Valley and Campbell River are still in a strong ‘Seller’s Market’.

 


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