VICTORIA BC – A slow start to the year in Victoria’s real estate market is evidence that buyers are continuing to wait for prices to drop. Although January 2013 sales are 27% lower than January 2012, the six-month average price for a Greater Victoria home is only down 1% for the same period.

“We are realistic and sales are not what we would like to see,” says Shelley Mann, President of Victoria Real Estate Board. “But there are many stories within the market. This week, three houses sold in Sidney that were all newly listed and they sold for over asking price.”

Mann adds that she’s spoken to several local REALTORS® who have clients who want to buy, but they are looking for good houses with quality amenities. “One Member told me that he has several potential buyers, but they can’t find anything they like.”

In January, 294 properties sold, compared to 372 in January 2012. The median price of a single family home is $482,500 compared to $522,000, a decline of 7.6.%. The six-month average shows a 1.4% decline, year-over-year, but less than one percent over last month.

“My basic message is that sales are down, prices are flat and our provincial economist is predicting 2013 will be a transition year,” Mann says. “He believes the economic fundamentals are strong, and as a result the sales volume will increase 4% this year over 2012, but prices will remain flat.”

Current active listings are 3,870. There were 81 condominium sales in January, a 24.6% increase over December 2012, while the median price of $238,350 is down 12.1% year-over-year. Townhouses saw increased sales in the past month and a median price of $382,000, up 4.7% year-over-year.

Total Waterfront Single Family Dwellings sold: 9, up 5 over January 2012 Total Non-waterfront Single Family Dwellings sold:144, down 43 sales from January 2012 Single Family Dwellings sold over $1 million: 3 (1 over $2 million)

 Total Single Family All Areas includes Shawnigan Lake/Malahat, Gulf Islands and Up Island

Summary Report and Graphs

Monthly Sales Summary

Average Selling Price Graphs

Active Listings, New Listings and Sales Graphs

Break out the mop and the paintbrush. It’s time to give your home a mini-makeover. I watched the new HGTV Show last night, Buying & Selling, with my two favourite Property Brothers, Jonathan and Drew Scott. I loved how honest they were with the homeowners about cleaning, de-cluttering and staging their home for sale.  Here is the episode if you want some excellent advice before you list your home! Also, here are all the little things you can do to attract the big offers.

VICTORIA BC – Victoria’s real estate market ended 2012 with relatively flat pricing when compared to 2011, along with similar sales numbers for the third consecutive year.

Total MLS® sales in December 2012 were 283, a 17% decrease over December 2011 when 339 units sold. A different picture is told, however, when comparing full years, where there is only a 5% decline from 2011 to 2012.

Similarly, pricing has held steady year-over-year. The annual average price of a single-family home in Greater Victoria was $603,298 in 2012 compared to $613,839 in 2011. Shelley Mann, President of the Victoria Real Estate Board, notes that while the annual average in 2010 was $629,925, it was $580,748 in 2009.

“In December there were less active listings on the MLS® system than in recent months,” Mann says. “With less competition, homeowners have a better opportunity to sell. But the property must show well, and they cannot expect to sell for the all-time high prices of 2010 and 2011.” Current active listings are 3,896.

“We continue to see buyers waiting to make their move. Two factors seem to have triggered this, the first being the tightening of lending regulations which has affected the purchasing power of many consumers,” Mann says.

“The second factor is that some buyers are continuing to wait for the market to fall,” Mann says. “What we heard at the local 2012 CMHC Housing Outlook Conference is that the market has bottomed out and slow growth is in store for 2013.”

There were 65 condominium sales in December 2012, compared to 98 in November 2012 and 89 in December 2011, and the year-over-year average price has decreased by 3%. Townhome pricing remains flat.

Total Waterfront Single Family Dwellings sold: 10, also 10 in December 2011 Total Non-waterfront Single Family Dwellings sold: 146, down 27 sales from December 2011 Single Family Dwellings sold over $1 million: 10 (3 over $2 million)

Total Single Family All Areas includes Shawnigan Lake/Malahat, Gulf Islands and Up Island

Summary Report and Graphs

Monthly Sales Summary

Average Selling Price Graphs

Active Listings, New Listings and Sales Graphs

VICTORIA BC – While the number of single-family home sales has held relatively steady over the last three months, Greater Victoria REALTORS® are noting a year-over-year decrease that coincided with tighter mortgage regulations imposed in July of this year. Amortization periods were reduced to 25 years for high-ratio buyers – those with less than 20% down payments.

“The change from a 30- to 25-year amortization can result in an additional $150 to $200 on the monthly mortgage payment, which is impacting many first-time homebuyers and limiting the number entering the market,” says Carol Crabb, President of the Victoria Real Estate Board.

Crabb also notes that the median price for a single-family home in Victoria remains relatively flat, increasing 1% over November 2011. “Sales may have slowed, but the median price of single-family homes has not decreased. Condominiums, the primary option for those first-time buyers, have a decreased median price of 10%.”

Total MLS® sales for November 2012 were 366 compared to 373 the previous month; 202 single-family homes sold throughout the Victoria Real Estate Board’s region, compared to 293 in November 2011. The median price for single family homes was $540,000, up 1% from last November’s median of $536,500. The average price for the same period is up $48,373 (8%), but this is influenced by two sales over $2 million and one sale over $5 million. Month-over-month, the six-month average for single-family homes is flat.

“We are now moving into the slower winter season. Both Canada Mortgage and Housing (CMHC) and Cameron Muir, Chief Economist of BC Real Estate Association, predict the next few months will mirror October and November, followed by slow growth for the balance of 2013,” Crabb says. BC and Greater Victoria continue to experience strong full-time employment growth, an expanding population and low mortgage rates.

“For buyers, there is a good supply of homes on the market, so while they have time to conduct due diligence they shouldn’t expect large reductions on all properties. We are still seeing quick sales and the occasional bidding war on homes that are priced well.

“Sellers have a lot of competition, so curb appeal, how the house shows and competitive pricing are key to moving from ‘For Sale’ to ‘Sold’,” Crabb says.

Condominium sales remain stable with 98 in November 2012, compared to 92 in October 2012 and 104 in November 2011, although the year-over-year median price has declined 10%. Townhome sales declined 38% in 12 months, while pricing remains flat.

Total Waterfront Single Family Dwellings sold: 6, down 4 from November 2011 Total Non-waterfront Single Family Dwellings sold: 196, down 97 sales from November 2011 Single Family Dwellings sold over $1 million: 17 (2 over $2 million, 1 over $5 million)

Summary Report and Graphs

Monthly Sales Summary

Average Selling Price Graphs

Active Listings, New Listings and Sales Graphs

VICTORIA, BC—While prices held steady through most of the Greater Victoria region’s real estate market in October, government lending regulations have had the desired “cooling effect” on year-over-year sales numbers.

Total MLS® sales for October 2012 were 373 compared to 483 in October 2011. During the month, 211 single family homes sold throughout the Victoria Real Estate Board’s region, compared to 260 in October 2011. The average price for single family homes was $576,720, down 2% from last October’s average of $590,539. The median price for the same period is down $24,000 (4.5%).  Month-over-month, both sales volume and the six-month average for single family homes are flat. Active listings are 4,876. 

“Overall sales for Greater Victoria are down 19%,” says Carol Crabb, President of the Victoria Real Estate Board. “Federal measures to slow real estate sales nationally are having a local affect. Our REALTORS® tell me that with the reduced amortization rates, many buyers are having trouble getting financing for the type of home that fits their needs, particularly first-time buyers.”

Crabb also notes that there are fluctuations across the region. Sales and prices are flat in the Core Municipalities, while sales are down on the Saanich Peninsula, with declined sales and prices on the Westshore. “I strongly caution against reading too much into the numbers,” she says. “Both activity and prices vary by sub-area. For some the sample size is always small, so a sale of one or two properties can result in a 50% change.”

There were 92 condominium sales last month, 37% fewer than during October 2011. Six manufactured homes sold compared to 10 during the previous October. Townhome sales declined 37% and the average price dropped from $428,040 to $387,769, a 9% decrease.

Total Waterfront Single Family Dwellings sold:                      15, up 3 from 2011

Total Non-waterfront Single Family Dwellings sold:              196, down 52 sales from September 2011

Single Family Dwellings sold over $1 million:                           11 (1 over $2 million, 1 over $3 million)

Stats Quick Reference

Total Single Family All Areas includes Shawnigan Lake/Malahat, Gulf Islands and Up Island

Summary Report and Graphs

Monthly Sales Summary

Average Selling Price Graphs

Active Listings, New Listings and Sales Graphs

While the use of average price information can be useful in establishing trends when applied over a period of time, e.g. six months or longer, the Victoria Real Estate Board cautions that an average price does not indicate the actual value of any particular property. Those requiring specific information on property values should contact a REALTOR®.

Don’t waste your hard-earned money on interest!

These methods have allowed many people to shorten their mortgage life by years in a very short period and enjoy a greater lifestyle for a longer period.

One of the highest financial priorities of Canadian homeowners is to pay off their mortgage as quickly as possible. Paying down extra principal in the early years can shorten the life of your mortgage — and dramatically lower the interest you’ll pay over the long haul. “Pay-Off Tips” below describes some of the most effective methods of achieving this.

TIP #1: MORTGAGE  PAYMENTS  MADE WITH AFTER TAX CASH

More Canadians are becoming aware that since mortgage interest is not tax-deductible in Canada you are making mortgage payments of both principal and interest with money that you’ve already paid tax on — “after tax dollars”. This makes it even more important to eliminate the drainage of disposable income as soon as possible!

TIP #2: PREPAYMENTS GIVE GREAT RETURN ON INVESTMENT

For example,  if you pay an average of 4% in mortgage interest, for each $1,000 by which you reduce your mortgage principal, you will save $40 in after tax cash every year. If you are paying taxes at a marginal rate of 40%, you have to earn $66.67 each year to pay the interest on every $1,000 of principal outstanding…a heavy burden, but also a tremendous implied benefit to reducing this balance. In fact, the example shows that the “return on investment” for making prepayments on your mortgage is 6.67% before tax and 4% after tax — far better than most fixed return investments (bonds,  GICs, etc.).

TIP #3: INCREASE YOUR PAYMENT ANNUALLY TO THE MOST YOU CAN AFFORD

The upside is that most lenders will allow you to reduce it again to the previous level if it turns out to be too great a burden or your circumstances change.

TIP #4: UTILIZE YOUR RRSP-DRIVEN TAX REBATE AS A MORTGAGE PREPAYMENT METHOD Even if you can only prepay annually, make sure these funds are set aside for that purpose. Many Canadians will borrow (at prime) to buy  an RRSP to ensure the maximum rebate. When applied to the mortgage principal, this refund is a “gift that keeps on giving”. Combining the refund with the tax-free interest earned on the RRSP over  the subsequent years will quickly outpace the short-term interest costs of the RRSP loan.

TIP #5: INCREASE THE FREQUENCY OF YOUR PAYMENTS

Make accelerated bi-weekly payments to get a “free” principal reduction equivalent to one full mortgage payment every year — painlessly. Unless you are paid weekly it makes little sense to make weekly payments. All you’d be doing is making a smaller payment, and deferring the difference for a week.

TIP #6: MAKE USE OF DOUBLE-UP PRIVILEGES WHEREVER POSSIBLE

Tell yourself that you will “skip-a-payment” whenever necessary… then skip only when you absolutely must.

TIP #7: ROUND YOUR PAYMENTS UP

By adding even a nominal amount of say, $10 per payment, the amount of interest you are saving will be unbelievable, and the extra money relatively painless to part with.

TIP #8: PAY A LUMP SUM WHENEVER POSSIBLE

By decreasing the principal of the mortgage, your payments will not be allocated as much to interest in the future, thereby accelerating your freedom to mortgage-free life.

TIP #9: KEEP PAYMENTS THE SAME WHEN MORTGAGE RATES HAVE FALLEN

If the payment amount has not been a problem so far, then keep it the same thus paying down the principal faster.

TIP #10: RAISE PAYMENTS IN LINE WITH INCREASED INCOME ON AN AFTER-TAX BASIS

If your income increases, don’t keep your mortgage payments the same. Although the disposable income may be fun to spend on unnecessary luxuries in the short-term, the long-term benefits of being mortgage free faster and saving those interest payments will far outweigh the short-term curtailing — just pretend that your income did not increase and maintain your usual lifestyle.

I attended the Annual Victoria Real Estate Board election meeting this week where Cameron Muir, Chief Economist of BC Real Association spoke. He had some strong, positive news to report and feels the media and news are exaggerating some of the declines these past few months and feels as we head into 2013 we will see about 2% increase in prices within Victoria, after only a  3.5% drop so far this year on average prices (keep in mind higher-end properties and townhouses/condominiums have seen some larger declines).

Cameron quoted three strong economic factors that are at play which in his opinion, won’t lead us into a recession or real estate bubble within Canada and the Province:

 1.            Strong full-time job reports within BC and especially that  12,000 full-time jobs were created even though 5,000 part-time jobs lost, but it’s been the highest number of full-time positions created during the past decade! This is good, solid underpinning heading into the housing market next year if buyers have jobs, feel secure and can qualify for credit.

2.            Population growth is continuing on par over the past few years and not declining as it did in the 90′s. We have 4.5M people in the Province with the boomer population coming in a big wave soon and Victoria and the Island still targeted as their preferred retirement communities to relocate to.

3.            Interest Rates are continuing to be at historic lows, with only small incremental increases coming but not in the immediate future. The news these days and last weekend’s National Post quoted a story about Canadian household debt climbing but Cameron cautions the statistics don’t paint the entire picture and that if the averages they are using over the past 25 years should be factoring in the average 5 year mortgage rate which is 10%: right now we are no where near that level of interest rate. He is not concerned and especially that 2011 had some dismal employment stats but 2012 and heading into 2013 can only improve these numbers and confidence in the market. He also said stats show after credit tightening there is a pattern of decline and then an upward trend and we saw that in 2006 and if the same is true present day, we have seen most of the fall out of this past spring’s Federal government policy changes.

 Although there are still some major headwinds the Canadian economy is facing with global and US problems, it would take a major macro economic shock (i.e. recession, sharp increase in unemployment and household financial credit stress over a vast number of homes) for us to see some major declines in pricing within the Canadian housing market and within BC. Our Canadian economy is still “2 steps forward, 1 step back” and will finish the year like that.  Cameron showed an interesting slide in his presentation with the statistic for sales-to-active listings throughout the Province and Victoria ranked second at 12% which is a very strong showing.  

Another positive indicator is BC’s exports are so diversified especially in comparison to Alberta and Ontario who rely to heavily on the US and this has already helped stabilize the Province. In his opinion, he forecasts a continuation of flat, moderate pricing over the next 1-3 years, with no dramatic increases or drops. Cameron said “show him the beef” from the critics who are quoting the “sky is falling in” and “prices are going to drop 20, 30 to 50%” and the housing market is going “hell in a handbasket” – his economic factors and principals just don’t support these theories or comments.

At the end of the meeting, the Victoria Real Estate Board of Directors for 2012-13 was announced and I am proud to be part of such a professional, committed and forward-thinking Association of Realtors!