Okay, Technically June is not over yet, but unless during the last days of the month of June 2010, we set records that are nearly impossible to reach, it is safe to say that a trend that started a few month ago will continue.
What is the trend, well simply stated we (the licensed Realtors in Victoria BC Canada), list new listings at a pace of about 2 to 2.5 times the number of sales being reported during the same month. Fur June 2010 so far that means that we have reported 1,294 new listings but only sold about 550 properties this month.
How does that relate to last year you ask, well last year we listed more listings during the same month, 1,436 exactly, but we also sold 946 homes during June 2009.
We can make all these bits of information say whatever ever the special interest groups want them to say, and It is relatively simple to make numbers do a little user friendly dance.
Reality is that real estate is not selling nearly as fast or as often as it did a few years ago, and there are a whole bunch of reasons for it, but most of it has to do with affordability, the local economy and confidence by buyers that they will be making a safe investment if they spend their money on a property.
Even the reports of average prices holding are a bit of a fable off course. Here is a way to explain what is happening with averages, (and a reason not to stare yourself blind on them).
Lets for instance say we sold 200 homes in and around a hypothetical average range of $ 620,000, but we also sold 25 properties with an average of $ 1,000,000, you can see how this would change the averages, forget about the math, for a moment, and lets look a little deeper and review these million dollar sales........
What is happening is an overall narrowing of the market, the high end is seeing dramatic price reductions to the tune of $ 50,000 to $ 200,000 and is pushing their price ranges down, point in case as an example Bay View Condo's dropping by 50%. So now we see a few people making the leap and buy a much more expensive property for less money but still at a substantially higher than average price. Never mind that the asking price dropped by 10 to 50%
So for some people that provides a golden opportunity to buy more property for a better price, however for most of us, it means that all prices eventually will be affected. Because reality is that in order for any seller to sell in a market like we have today, that the asking price of the property offered for sale has to be the best possible deal in review of all the other comparable options a buyer can consider.
I will go a little further yet, with interest rates likely to stay at low levels for a substantial period of time and inventories at record levels, (and hundrreds of properties for sale but not even offered for sale on the MLS system) what incentive is there for a buyer to buy today versus wait for the market to further adjust.
Hence my suggestion for sellers that are not very motivated to move at all, to cancel their listing now, and remove your property from this growing list of properties that are not competitively priced in the market.
Once we find a new balance for the market where the number of listings and sales are providing less than 6 month worth of inventory we will then have the likely ability to predict a return to healthier growth and price appreciation levels.
Now if properties owners have lived in their properties for many years and are planning to move a little small, now is a great time with great options and opportunites, and even if you are planning to move up in price range, you will find there are many great more affordable options around.
however if you bought in the last few years and are hoping to make a profit from your property now, in order to move, you may find that your anticipated profit can not be realized.... so stay put, improve the value of your property, not by waiting, but by your own input and added value activities, and once the market returns to balance, you will have gained more than you would have compared to doing nothing.
We have been here before, and as always, the market place is not something we can force in any one direction in a very short time. so be patient and we promise, all will be well given time and a little common sense.
Best advise we can give you is to fully review your situation and options very carefully and surround yourself with a few trusted experts in the areas that affect you the most as it relates to your real estate decisions. Your Lawyer, your Realtor, Your Accountant, your Family and trusted friends so that you can be certain that your personal situation is reviewed in such a way that you can make balanced, and well researched decisions.
If your future includes real estate decisions in and around Victoria BC, it would be our pleasure and privilege to discuss your options, honestly, ethically and professionally with you, no cost or obligation.