Friday 'afternoonitis' has already set in, but since I spent a good part of the morning crunching numbers, I'm going to tough it out and report the results of my efforts.
This review is limited to single family dwellings and strata duplexes in Victoria, British Columbia, and in the surrounding municipalities, excluding Sooke. It compares listings and sales for the four week period which ended yesterday, August 3, 2006, with the identical four week period one year earlier. I'll refer to these report periods as 'the 2006 report period' and 'the 2005 report period' or 'the earlier period' (or words to that effect) - but remember, each is only four weeks, not the whole year. (Maybe in future reports I'll find a way to present results in a nice graphical way, but for today at least, it's boring old text.)
You may have noticed more 'For Sale' signs recently. It's true – more homes were listed in the the 2006 report period than the earlier period. More homes were sold too, but the percentage of homes sold was quite a bit higher in the earlier period (51% for 2006 versus 68% for 2005). Taken alone, that may not be very significant, because the average sales per listing for the whole 12 months ending yesterday was about 68%. So, maybe July 2006 was just an 'off month' in terms of buying activity.
But there's more to it than that. Sales velocity is another indicator. By 'sales velocity' I simply mean the average number of days that homes that sold were on the market before a binding contract of purchase and sale was executed. In almost every price range, sales velocity was higher for the 2005 report period than for 2006.
A year ago, the homes that flew off the shelf faster than any others were priced under $500K, averaging only 32 to 33 days on the market. Oddly, this year sales velocity for homes below $400K dropped noticeably, to 41 days on market. I say 'oddly', because one might ordinarily think that the more 'affordable' a home, the faster it might sell, but in the 2006 report period, the briskest sales pace was in the $400K to $500 range (33 days).
Homes priced below $400K in 2005 represented a considerably larger market share than in the 2006 report period (155 listed, 121 sold versus 129 listed and 92 sold in 2006). This probably simply reflects the year to year price increase in real estate in Victoria. In all other price ranges, the number of homes to hit the market in the 2006 report period increased. But here's something interesting: in the 2005 report period, nearly one in five homes below $400K sold for more than the original asking price, whereas this year, the figure was about one in ten.
Homes in the range of $400K to $500K were hot in the 2005 period. 86% of those homes sold, and on average, they were on the market only 26 days. Not only that, one in five in this range sold for more than the original asking price, and after only averaging 9 days on the market! When you take into account that most offers are 'conditional' for a week or so, you had to be fast on the draw to have a shot at actually trying to purchase one of these homes.
Sales in this price range ($400K to $500K) were also brisk in the 2006 report period, but not as brisk. Sales were down to 71% from 86%, only one in ten went for more than the asking price, and the average difference between original asking price and actual selling price increased slightly. The most noticeable change was sales velocity, going from 26 days on the market last year to 41 this year.
The biggest increase in homes listed in the 2006 period was in the $500K to $600K price range. They increased to 115 homes from only 62 the year earlier. But again, percentage of sales to listings was down noticeably (to 43% from 61%), as was sales velocity (to 42 days on the market from 33 the year earlier). The odd thing here is that this year, the percentage of homes that sold for more than the original asking price increased, to 16% of homes in this price range. And they went fast – averaging only 11 days on the market. As an aside, it's interesting that of the homes that sold so quickly, 5 of 8 of them were new homes in Peers Creek.
In the $600K to $700K, price range, sales velocity was high in 2006 compared with 2005 (35 days on the market in 2006, 46 days in 2005). Percent of sales was only slightly lower in 2006, but the absolute number of sales in this range increased.
The $700K to $1Million range didn't show any remarkable changes between the two periods. Sales percentages were comparable, the number of listings was up about 20% and sales velocity was marginally down for 2006. A bigger change happened in properties priced over $1Million. First off, there were quite a few more listed (36 from 26). But second, there were quite a few fewer sold (8, down from 13). Does this mean anything? Your guess is as good as mine, but I very much doubt it. At this price range, the word 'average' goes out the window.
What about the rest – does it mean anything? That too is difficult to say. Certainly, a 'snapshot' of just one month in the life of a real estate market is like one chapter in a novel – interesting, but it doesn't tell the whole story.
But it does tell us it was less of a seller's market during the last four weeks than the corresponding period a year earlier. For sure in part it's the summer 'doldroms', but I for one wait anxiously to read the September chapter to see how the plot develops.
Bye for now,
...Victoria's blogging real estate professional.
