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Cumulative MARCH /2024 Sales in SubAreas

Courtesy NANCY SMITH and VIREB:
Market Stats

Record snowfalls, record rainfalls, tornadoes, forest fires, hurricanes and many international disasters have been in the news for the past three years. The 2020 decade has not started out well. Here in Canada, our economy has been weathering a rough patch with super-low interest rates, high prices on real estate, food and essentials, though energy prices in the oil sector has taken a beating. How do we predict the future? USA world involvement, severe homelessness and toilet paper wars have just tested our patience. Suddenly, interest rates skyrocketed, and just as suddenly, housing for the entry level buyers has again become more difficult. As in the past three years, financially secure people were not worried about mortgage rates but were disappointed when investment income tanked. With this sudden increase in interest rates, investors are now turning there eyes to other financial tools other than real estate. Will house prices drop like an escalator or an elevator, or will they drop much at all, in Canada? Housing supply has been an issue for the past thirty years, and for the next thirty years, with labour, training and material shortages, we do not expect to see much in new housing supply. A glut in new homes would pressure a severe drop in pricing, but materials and inflation are counter-balancing any hope. Which experts do we believe?

Though this is true in certain areas and certain markets, here on Vancouver Island, desirable homes are still selling as fast as they appear. Yes, people are refraining from entering a multiple-offer scenario, and buyers are able to request building inspections, shop for financing, and ask for reductions when homes are not measuring up to expectations. Roofs, windows, foundations, plumbing, electrical, wells and septic systems and insect penetration is again strong consideration when negotiating. This is good news. Increasing interest rates, when based off 2 1/2%, have sharply changed the financing landscape. Established buyers have seen market interest rates around 7.5%, so even a 4% mortgage seems affordable over the long term. We believe the Vancouver Island market will stay strong and will not succumb to any significant price drops as it is still a popular destination for Canadians. Those people with resources will always be able to shop and buy what they need and usually what they want. There was a housing shortage on Vancouver Island long before the pandemic, and forecasts suggest with the current and future labour shortage, supply shortage and transportation costs, there will be a 30-year new housing shortfall.

MARKET UPDATE for MARCH /2024

Courtesy NANCY SMITH and VIREB

As we enjoy a warmer and dry spring season, forest fire risks may be up and a worry for the coming summer months. The same concern is happening in the real estate market, where pent-up demand for single family homes seems to be prolonged by anticipation of mortgage rate reductions. For some people, moving is a necessity and homes are still selling, and inventory though improved, is still having an effect on market prices. Please Click on "Read more" for a brief accounting from VIREB.

Courtesy NANCY SMITH and VIREB

Like the stock market, we see a little blip either up or down and make decisions to sell or buy. Long term planning, investing and decision making generally produces the best results. No one can foretell the future, but stay grounded in our financial decisions, whether we ask for professional help, or contemplate family needs. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

Weather in January and beginning February /2024 is reminding us of May. We are also experiencing 41% higher Google real estate searches and an uptick in inquiries. With a bit of temporary stabilization in mortgage interest rates, with a potential promise of slightly lower rates, we expect /2024 to be another brisk year for sales activity. Sadly the low-end market is bare, and overpriced properties continue to languish, but there has been plenty of activity in the low-medium range single family homes, with many multiple showings and multiple offers. Unfortunately for many, these homes are in the $800,000 and higher range. Even the condo and modular home prices are above the reach of many. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

If nothing else, to end 2023, there are many opinions about the real estate market direction. However, since 2019, we have heard nothing less than an expected market crash, or a market recession, or market price decline in residential real estate; not only on Vancouver Island, but Nationally and Internationally. We still contend that interest rates are affordable, housing is still in short supply and demand has not diminished. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

Bill 44, in our opinion, is a political move that will not garner the intended results in housing affordability. There are too many restrictions in the Building code and fire regulations, to make construction worthwhile for builders and developers. Neighbors in single family neighborhoods will not tolerate monster homes, excessive heights and massive increases in density. Vehicle parking issues in Canada would require underground garages, lot to building ratios are restrictive, as are building heights. Political solutions as in Bill 44, increased penalties, fees and autonomous control will not bring affordable housing to fruition. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

In the media, there are plenty of negative comments and exposes suggesting climbing interest rates will decimate the market, and force home prices to drop by 30% or more. If the media continues to scare people, as they did in 2019 about climbing house prices, then about pandemic panic, should we all run for an Ark? The financial crisis of 2008, as often referenced by the media seems to be another scare tactic to sell news. As in the depression of the dirty thirties, will we soon see lineups for food, clothing and children's items? Today however, we have modern transportation, internet and a very wealthy country. People are freaking out over astronomical price increases over the past three years, and it is easy to feel the pressure. Realtors are aware of housing shortages, in itself a scary thought, but the shortages will continue for years and years, thereby keeping the Vancouver Island real estate markets vibrant in the long run. Let us not panic, as Vancouver Island prices are still much below Toronto and Vancouver, and the well-off will continue to immigrate into British Columbia. Though we are surrounded by ocean, no Ark is required. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

The traditionally calm September is one of the calmest Septembers in many years. Interest rates share some of the blame with a nationwide slowing in retail, manufacturing and raw materials production. Some of this lackluster activity is being blamed on tensions in Russia and China. Of course the news does not supply a full picture, as commerce is a very complex and integrated system. Traditionally Vancouver Island real estate market remains reasonably stable, as this location is desirable for retirees and financially comfortable Canadian families, if not for living, but also for holiday events. In as much as certain homes are still receiving multiple offers, many homes have languished during September. For investors, the increasing rates for bonds and GICs are more interesting than real estate, in the short term. The market has been markedly quiet. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

Summer 2023 is coming to a close, the market at the end of August probably slowed since the final days of summer holiday and shopping for school supplies and clothes is taking a priority for families. Fortunately and unfortunately rental and sale home inventories are still very tight. With the extreme forest fire season, many residents of BC have been moved into temporary shelter and many of the displaced Yellowknife resident evacuees have not yet returned home. This has also been a huge distraction in the market when people are afraid to move, afraid of not finding accommodation and often, homes in forest-fire zones will not sell and insurance companies will not issue policies. The market has been markedly quiet. Please Click on "Read more" for an accounting from VIREB.

Courtesy NANCY SMITH and VIREB

Vancouver Island has been having wonderful tourist weather, but the interior of British Columbia is suffering with severe forest fires and heavy smoke. Insurance companies are wary of implementing new policies in forest fire zones, so the combination is making sales and movement a real concern. Please Click on "Read more" for an accounting from VIREB.

Current Sentiment is Pointing to a Stronger Housing Market.

We try to keep our local Market News and Market Statistics up to date monthly. This morning I saw USA stats as presented by Bloomberg and was surprised how similar their stats measure against Canada. It is difficult to project the long term trend by past news, but the current Corona Virus concern will affect our supply market for many products, as they have been a consistent provider. With the China shutdown, no one really knows the long term impact on our lives. Local Realtors are anticipating a strong 2020 home sales market. That said, we reproduce Bloomberg's USA housing statistics for your reading pleasure: