by Jim Bearman

In the Comox Valley, the stats show a 22% increase in the dollar volume of sales in the single family dwellings category for the month of October.  The sale of apartment condos was up 44 %, and lot sales were up 60%.  In the Campbell River market, these markers are even higher; 57% for single family dwellings, 47% for apartment condominiums and 157% for lots.  The market is roaring in these sectors.  There is more good news; lot sales in the Comox Valley are up 40% t0 9.3 million.  So, with this level of market activity, it begs the question… Is the market in balance?

A number of tools can be used to analyze the market for real estate.  One measure that is often overlooked, and not well understood is the SALES TO LISTING RATIO.  This ratio measures market activity and determines the balance between supply and demand for housing in any particular market.  To calculate this ratio, simply divide the number of sales by the number of new listings.  It is generally agreed that a ratio of 40 percent or less is a buyers’ market, 40 to 60 percent is a balanced market, and over 60 percent is a sellers’ market.

A buyers market is when there are more homes for sale than there are buyers.  This places downward pressure on home prices, as sellers compete for buyers.  For example, if there were 15 sales and 40 listings, 15/40 = 37.5%.  This would be considered a buyers’ market.

In a sellers’ market there is greater demand for homes and upward pressure on prices.   If there were 15 sales and 20 listings, 15/20 = 75%.  This would be considered a sellers’ market.

Real estate markets can be cyclical.  The above approach helps to determine just where in the cycle we are at any give time.  SO… Is the market in balance?

For the market sectors mentioned above, let’s see what the statistics tell us.

Comox Valley

Single Family Dwellings:  752 Sale s/ 1286 Listings = 58%.

Apartment Condominiums:  120 Sales / 283 Listings = 42%

Lots:  64 Sales/ 157 Listings =  40%

 

Campbell River

Single Family Dwellings:  508 Sale s/ 855 Listings = 59%.

Apartment Condominiums:  47 Sales / 135 Listings = 35%

Lots:  47 Sales/ 132 Listings =  36%

Most of these ratios fall within our definition of a balanced market.  In both communities, the SFD market is close to the upper limit, pushing towards a sellers’ market.  The apartment condominium sector is at or below the lower end of the range, pointing to a buyers’ market.  We will continue to monitor the Sales to Listing Ratio.

 

 

"There is more to life than simply increasing its' speed." ~ Mahatma Ghandi

Jim Bearman

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