Outside Influences Impact Spring Real Estate Market in Victoria

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A total of 688 properties sold in the Victoria Real Estate Board region this March, 25.9 per cent fewer than the 929 properties sold in March last year, but a 26.2 percent increase from the month previous. The sales of condominiums were down 28.2 percent from last year in March with 211 units sold. 

Single family homes were 30.8 percent down from the year previous, with 337 sold this March.

“As we expected, March sales are tracking lower than in 2017,” says Victoria Real Estate Board President Kyle Kerr. “This is likely due to a number of factors 

that have created hesitation in consumers, including recent heavy measures by the provincial government to reduce the value of home prices and the federal 

government’s new mortgage qualification rules. Combine these factors with rising interest rates and you’ve got a housing market that is in transition due to 

outside influences. Every time there is intervention into a market, it takes a few months for the market to rebalance. With the continual changes of late from 

different levels of government, our market is experiencing a new cycle of ongoing uncertainty.”

There were a total of 1,766 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of March 2018, an increase of 

14.3 per cent compared to the month of February and 13.5 per cent more than the 1,556 active listings for sale at the end of March 2017.

“Despite all of the above, we continue to see benchmark price increases across our market and demand persists – partly due to low inventory – but also because of our highly desirable location,” adds President Kerr. “Specific areas and price points are experiencing varying pressure on price and demand – which creates micro-markets. We are still seeing multiple offers and above asking price sales in some segments. Active buyers in our market may see some relief as inventory is slowly growing. This showcases why it is important to work with your local REALTOR® in this transitioning market to ensure you have the most up-to-date information to make purchasing and selling decisions.”

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March 2017 was $785,600, while the benchmark value for the same home in March 2018 increased by 9.4 per cent to $859,400, higher than February’s value of $840,300. The MLS® HPI benchmark value for a condominium in the Victoria Core area in March 2017 was $409,700, while the benchmark value for the same condominium in 

March 2018 increased by 19.6 per cent to $490,000, which is higher than February’s value of $472,600.

Originally published by the Victoria Real Estate Board

Notes for Interpreting Victoria Real Estate Board Statistics

The use of sale price statistics can be useful in establishing trends when applied over a period of time, i.e. six months or longer. The Victoria Real Estate Board cautions, however, that such information does not indicate the actual value of any particular property. 

How Does the Victoria Real Estate Board analyse MLS Statistics?

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Most properties sold in Greater Victoria and the Southern Gulf Islands are listed and sold on the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) System.

To analyze sale price trends in the Greater Victoria housing market, the VREB moved away from reporting changes in average and median sale prices. In its place, we now analyse trends using a system called the MLS® Home Price Index (MLS® HPI).

At the heart of the MLS® HPI is the concept of the benchmark home, a notional home that includes the most common attributes of typical homes in a given area. By analyzing ten years of VREB MLS® sales data, benchmark homes have been defined in the single family, townhouse and condominium apartment categories for individual neighbourhoods, regions and the Greater Victoria area as a whole. The MLS® HPI model then uses a sophisticated statistical analysis methodology to determine values for benchmark home attributes in order to arrive at a benchmark price for each of our benchmark homes.

MLS® HPI computed historic monthly benchmark prices for each benchmark home back to January 2005. Moving forward, VREB MLS® sales data is used to compute new benchmark prices each month. In addition to being able to report on changes in benchmark prices over time, MLS® HPI also maintains a running index of the percentage change in benchmark prices from the January 2005 starting point.

We overcome the deficiencies inherent in a dependence on average and median sale prices, which are based on the particular mix of homes that are sold in a given month by using the MLS® HPI benchmark prices and index values to report on market trends. This is because MLS® HPI measures changes in benchmark prices of the same benchmark homes, month after month.

Representatives from Statistics Canada, Canada Mortgage and Housing Corporation, Finance Canada and Central 1 Credit Union have also reviewed and endorsed the MLS® HPI methodology, and provided valuable contributions in support of its development.

The MLS® HPI is another tool that REALTORS® can use to help buyers and sellers understand local real estate market price trends.

Originally published by the Victoria Real Estate board