October 1, 2017
Well, the last bit of summer is hanging on, and what a summer it’s been!
Traditionally, August and September are slower months. But that certainly wasn’t the case this year. There were 80 single family homes sold in the Cowichan Valley in September; that’s a small decrease from the 87 sales we saw in the same month last year, but still way stronger than the 61 sales in September of 2008 when the market was much slower. And the average sale price for single family homes in the Valley last month was just over 447-thousand dollars; that was a 14% year-over-year increase. Another tool we look at, called the Home Price Index, shows that from August 2016 to August 2017 sale prices in the Cowichan Valley were up a staggering 19%
Homes are selling for top dollar, and they’re selling quickly. Last month the single family homes that were listed on MLS sold for an unprecedented 108 -percent of list price, and they were on the market for an average of just 27 days.
The biggest reason for the increase in prices is continued low inventory levels; there were just 185 homes on the market in the Cowichan Valley yesterday, compared to 202 on the same day last year.
So why is the inventory so low? One of the factors that’s different today than in the past is development. When the market has gone crazy like this in the past, developers and builders would put up new homes until the market was oversupplied, and then the market naturally slowed down. One of the big problems in 2017 is there is so much red tape at different levels of government that new developments have been dramatically slowed down. Combine this factor with immigration from other provinces and around the world – people coming here either to invest and start new businesses, or to retire. These new arrivals all need housing, and it simply is not being built quickly enough. Another key factor is that fewer people are listing their homes because they’re afraid they’ll have nowhere to go when their place sells.
Different levels of government have taken steps to slow things down; there’s a 15% foreign buyer’s tax in Vancouver and Toronto, rising interest rates, tough new mortgage qualification rules for high ratio buyers, and tougher mortgage qualification rules on the horizon for conventional mortgages. These new measures, combined with dramatic new reductions in money that families can take out of China, have slowed the market down sharply in Ontario and there are indications that the same thing may be about to happen here as Victoria sales volumes have slowed down substantially. Here is a link to an article on the proposed changes and updates on the Toronto housing market.
One of the important things to consider if you’re selling is the notion of “staging” your home to get the highest price. No matter how eager they are to get into the market, I urge my clients to slow things down a little and do it the right way. My most successful listings have involved clients who’ve listened carefully to my advice to make their homes shine before they put up the “For Sale” sign. Having a home that is ready for sale is very different than having a home to live in. My advice is to always remove the clutter and repair/finish all the little things you’ve been meaning to get to. Making your home show the love that you’ve put into it over the years is critical. That includes inspecting older septic systems, attics, and other potential problem areas before the listing goes “live”. One of the biggest mistakes I see all the time is incomplete listings on the MLS; no pictures, no comments, etc. In this market, it’s critical that when your listing goes live, it is 100% complete; your Realtor has done all their homework so the questions can be answered immediately and the entire presentation shows off your property for all it is truly worth. These simple steps will put a lot more money in your pocket and make the whole transaction go a lot more smoothly.
Patience is key. My clients will tell you I am not a panicky, “jump-the-gun” Realtor; I take my time so the seller gets the highest possible return. So if you want to take advantage of the low inventory and higher prices, now is the time to do it. Give me a call, and let’s talk.
Here is a link to this month’s Graph Stats for the Cowichan Valley, courtesy of the Vancouver Island Real Estate Board: Cowichan Valley Graph Stats
I hope you find this current market information informative. If you have any questions about the market please feel free to contact me anytime.
Thinking of selling? Please feel free to contact me for advice on preparing your home for the market. What money should you spend if any? When is the best time to list? I am happy to consult with you anytime even if you are not planning on selling for some time.