It's Friday afternoon again – time for another report.
Last Friday I talked about sales of single family homes in and around Victoria for the same four week period in 2005 and 2006. This week is about condominium apartment sales from July 14 to August 10, 2005 and 2006.
Tracking condo sales is interesting. To begin, when a new condomimium development comes to market, many individual units are listed for sale. This can lead to significant variations from month to month, and so a 'snapshot' of any single month can be a bit misleading.
Second, not all condo developments are brought to market via the Multiple Listing Service. This means that listing and sales information for condos will always be under-reported here, because my source of information is limited to data from the Multiple Listing Service.
Third, new condominium apartment developments are frequently introduced to the market before a hole in the ground has even been started. This means that for new condos, the average number of days a unit is on the market before a contract of purchase and sale is entered can be skewed.
With these factors in mind, let's get started.
To begin, overall listing activity was up, but only slightly, in the 2006 period. At the same time, overall sales numbers were down, from 185 last year to 161 this year. In other words, last year the sales to listings ratio was 1 to .88, and this year, it was 1 to .73. In percentage terms, that translates to a 17% reduction, year to year.
At first blush that result doesn't seem to square with the apparent fact sales velocity was significantly higher this year: overall days on market was 47 in 2006 versus 67 last year. But by factoring out sales of new construction, the picture changes dramatically.
Other Than New Construction
2005 was actually 'hotter' than 2006 for other than new construction: the average days on market was 28 last year, 42 this year. Not only that, last year about 15% of non-new condo units sold for more than the original asking price, whereas this year, that figure was down to about 4%. For this particular report period, the average price for a used condo was up by nearly 15% to about $$257,000. Don't read too much into that, because average prices can move around quite dramatically from month to month.
New Construction
In both years, new construction on the Multiple Listing System represented about 19 or 20% in terms of numbers of units. Sales velocity appeared to be much higher this year (59 days on market versus 136). Why would that be?
One possible interpretation is that the typical buyer this year was more attracted to new construction than previously. But another more plausible factor is the possibility that condo developments are simply not being brought to market as early as in the past. The disincentive to bringing units to market very early is escalating construction costs. Rising costs make it riskier for developers to nail down sales prices too far in advance of construction.
So, in these days of rising costs, I'm not reading much into the seeming acceleration in sales velocity for new condo construction. What about other factors?
Average sale price for new construction was up by modest 2.5% over last year, to about $336,000. In the 2005 report period, the average sale price was actually about 2% higher than the average list price, whereas in the 2006 period, the two figures were virtually the same.
Summary
In summary, the market for 'used' condo apartments seems a bit cooler from early July to early August this year than last year, giving buyers more opportunity to shop around. It's a bit harder to come to any conclusion for new construction. We'll see what the next few four week periods tell us.
Bye for now,
Bye for now,
...Victoria's blogging real estate professional.
