Greater Victoria's Single Family Homes For Sale Inventory Reviewed
Greater Victoria Real Estate Single Family Home Values are (as many other products) affected by Supply and Demand for property in any Area and Property Type. We have all heard the statement that Real Estate is a "Supply and Demand Industry", okay we get it, so how does that affect you the home owner wanting to buy or sell...
High Demand combined with Limited Supply causes prices to go up relatively quickly.
Low Demand combined with High Supply causes prices to go down relatively quickly.
As demand increases or decreases for any type of property in any given area sales results (or the lack thereof) will affect the time on the market, list to sale price spread and eventually the prices any property will sell for.
Typically supply and demand are affected by a variety of local, regional, national, and international factors. From improving local economy to lower or higher national interest rates, from the local weather to war at the other side of the world each and every single event or issue can and often does affect in some way the local market conditions (shifts).
In order to review the current Single Family Market conditions of most areas in the Greater Victoria Market area, it is important to periodically review what both the supply and demand of various property types are at any given time.
In Review from the information below it is easy to see that there are some areas that truly have a significant oversupply of property. for example Sooke, Highlands, North Saanich and Even Sidney, show inventory absorption periods of 22, 18, 19, 11 months respectively. As such the likely hood of market recovery and increasing prices are relatively low. If you own property in those areas and are serious about selling your property, it would be best to consider very aggressive pricing and or offer considerable incentives. We have a few creative strategies that have generated substantial results for many of our clients, please contact us for details.
On the other hand Oak Bay, Esquimalt, and to a lesser degree Victoria, Saanich West, Saanich East, Metchosin, Central Saanich are showing Balanced Absorption Levels that would indicate that prices are likely leveling off and show no real reason for further price adjustments (unless having been on the market for longer than average time periods.
The remaining areas (Vic West, View Royal, Langford, Colwood) are in moderatly slow absorption. The slower absorption for these areas would indicate that moderate price adjustments may still be required if sellers are serious to sell.
The Concept of Absorption rates represents the amount of time it would require to sell out the currently for sale inventory at the current number of sales per month. (current inventory/ Number of sales in 30 days).
Above we show the Current Greater Victoria Single Family Homes Inventory and Sales Statistics, lets review traditional inventory and sales relationships.
- When we maintain approx 3 or fewer months of inventory we typically talk about a strong or high inflationary market situation.
- When we maintain approx 4 to 7 months of inventory, we typically talk about a balanced to normal market situation.
- When we maintain over 7 months of inventory, we typically talk about a slow to very slow market place.
Locally there has been some perception that our local inventory and sales have been affected by an oversupply of newly constructed property, we are showing a break down of total, new and resale inventory.
As always, the information provided are general indications and may not affect any one property.
It is nearly impossible to predict or estimate when and or at what price point properties will bottom out, however given some of the information in this report and combined with some of our earlier sales to list price ratios one could develop a relatively reliable indication as to short to medium term property value and property sales direction, which may assist both home buyers as well as sellers to determine what is in their respective best interest.