Sales have continued to slow during the summer after a fairly robust first half of 2010. Many experts agree that the rush to beat the HST made for a spike in sales before July 1, and many people that were considering entering the market did so earlier in the year. The summer of 2009 was an exceptional period of activity, and although sales in August of this year are only slightly more than half the number of sales from 2009, we are still seeing a 97% sale price to list price ratio.
Sales declined by 102 from July’s 527 to 425 sales this month. That difference is comparable to the change in last year’ July-August of 169sales ( 933-764), and is in keeping with the usual summer trends when many people are away on holidays.
The number of properties listed for sale on the Victoria Real Estate Boards MLS System® sat at 4,356 at the end of August 2010, up from 3509 available this month last year, but still below the 2008 levels of 4657. See how the Active Listing count has fluctuated over the past few years here
It seems that prices were artificially raised in the fall of 2009 and the early part of 2010, mostly due to a low inventory level and many buyers entering competing offers for the same property. As the number of properties available for sale has increased, prices have begun to drop back to their previous levels from the year before. The average sale price for August 2010 was $586,676 down from last year’s average of $596,498. The median price of $548,500 for this year is still higher than last years median of $540,00 and is usually a better tool to gauge the market because average prices can be skewed by the sales of one or two multi-million dollar properties. See the graph of Average Sale prices in the Victoria Real Estate Market.
What does this mean for you? Well, the market has proven that it will not support overpriced listings and you should be wary of Agent’s that try to “Buy” your listing by promising you a higher price than what the market is telling you your home is worth. We all think our home is special, but the truth is buyers have a lot to choose from out there and if you want your home to be noticed in the crowd, you must price it at or near it’s sale price if you want to succeed. With half of all sellers leaving the market unsuccessfully, make sure that you price your home appropriately so that you can move forward with your goals.
Real Estate has always been a long-term investment, and if you manage your credit wisely, and don’t overspend what you can afford, you will reap the long-term benefits. See how Victoria’s Real Estate Market has performed over the last few decades and judge for yourself.
With housing costs rising in the City of Victoria, many homeowners are considering adding a secondary suite to their property in order to make things a little more affordable. Mortgage helpers make a home more marketable because they appeal to a larger range of buyers, especially first-time homeowners. There is also a much larger range of family dynamics now than ever before. The 1950′s ideal of the nuclear family with a picket fence and 2.4 children is giving way to a different family dynamic. Suites provide the perfect solution for adult children to be independent but still have grandma and grandpa nearby to help out with child care, and as the baby-boomer generation ages, more people are taking in an elderly parent instead of shipping them off to a home. Also, many young people are partnering up to purchase a property that they would not otherwise be able to afford individually.
I have included a link to a slide show put on by the Mayor of Victoria to discuss the secondary suite issue, which has all the guidelines in it. It refers to an incentive grant program that has run its course, so unfortunately that is no longer available.
Mayor Dean Fortin’s Secondary Suite Presentation
The 2 most important rules for a legal suite in the City of Victoria are:
1. Basement height has to be 7 feet or higher
2. The total square footage must be 1615 sqft or greater, and the suite
can only be 40% of the total floor space to a max of 968 square feet. If
the floor plan is smaller than 1615 sqft, you can add-on to make up the
extra room.
The City of Victoria has come to the conclusion that homeowners’ adding secondary suites is a great way to provide more affordable housing in the city at a much lower cost than if the city was to build affordable housing units on their own. Essentially, if you find a place in Victoria that meets the criteria, they will work with you to get it done. In January 2009, city council passed a resolution changing the Bylaw to make adding a secondary suite even easier. Read the Summary here
The City of Victoria has an excellent website full of information about secondary suites and all the rules and regulations here:
City of Victoria and Secondary Suites
Keep in mind that this applies only to the municipality of Victoria. Langford, Colwood, Saanich, Esquimalt and Oak Bay all have different rules and many of these municipalities have unauthorized suites. While Langford is known for its active promotion of development, Oak Bay is notorious for investigating and shutting down unauthorized accommodation. Before you purchase any property with the idea of developing it further, check the local municipal regulations.
If you are unsure where to find information in your municipality, contact me here Shamus@secretagentsells.com and I will be happy to help you find what you need.
