August 1, 2020
Sales continue to be remarkably strong in the Cowichan Valley making up for lost time earlier in the year due to the pandemic.
There were 93 single-family homes sold in the valley for the month of July, up from the 77 that sold during the same period last year; that’s a 21% increase and also up from the 70 that sold in June of this year. Sales numbers are well above the 10-year average of about 81 in July. This July represents the strongest sales numbers we have seen since 2017.
The annual rolling sales numbers of 661 sales in our valley over the past 12 months represented an 8% decrease from the 716 homes that sold in the 12 months ending on July 31st of last year.
The supply of single-family homes on the market in the valley continues to be at record lows. At the end of July 2019, there were only 234 homes for sale in the valley. Yesterday, that number was down to 157, which represents a staggering 1.68-month supply of homes in our marketplace. It’s worth keeping in mind that a “balanced market” has approximately a 5-month supply. The 10-year average for the number of homes on the market at the end of July is 374; in 2012 that was at a high of 615, and this month’s 157 represents the lowest supply of homes on the market in the last 10 years.
The pandemic has certainly continued to keep the inventory of homes very low adding upward pressure on prices in many sectors of the market. In many cases, buyers are bidding against each other as there is very little to choose from. Since March 15th, 75% of my listings have sold with more than one offer to choose from.
As for prices, the average sale price for single-family homes in the valley last month was $589,804, up 6% from the $554,183 at the end of July 2019. Homes between $500,000-$600,000 right now are representing 24% of the sales and is by far the most active part of our market.
Another more accurate indicator of what prices have done over the last year comes from figures in the MLS Home Price Index; that’s a benchmark for Realtors of a group of home sales. That gauge shows single-family homes in the Cowichan Valley going from $463,900 in June 2019 to $486,400 in June of this year; that’s a 4.8% gain.
Condominium apartment sales were down in July with 6 sales compared to the 9 that sold last July, and also way down from the 11 sales in July 2019.
Condominium apartments in the valley saw the average prices for July way up to $277,360; that's up 14% compared to last July. The Home Price Index benchmark price at the end of June was down 4% to $234,300 from $243,600.
The inventory of apartments on the market is rising with 37 on the market at the end of July compared to the 28 on the market at the end of last July.
I hope you have a great, safe, and enjoyable long weekend, and that you take every opportunity to truly enjoy the rest of the summer in our incredible valley.
BC Housing Markets Bounce Back in June
Vancouver, BC – July 14, 2020. The British Columbia Real Estate Association (BCREA) reports that a total of 8,166 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in June 2020, an increase of 16.9 per cent from June 2019. The average MLS® residential price in BC was $748,155, a 9.1 per cent increase from $685,968 recorded the previous year. Total sales dollar volume in June was $6.1 billion, a 27.5 per cent increase over 2019.
“Sales around the province surged back to pre-COVID-19 levels in June,” said BCREA Chief Economist Brendon Ogmundson. “While there are some temporary factors that may have pushed demand forward, we are cautiously optimistic that market activity will remain firm.”
Although listings activity has normalized along with sales, active listings are still down close to 20 per cent year-over-year and, as a result, many markets are seeing upward pressure on prices.
Year-to-date, BC residential sales dollar volume was up 0.6 per cent to $24.7 billion, compared with the same period in 2019. Residential unit sales were down 8 per cent to 32,875 units, while the average MLS® residential price was up 9.4 per cent to $751,722.
Bank of Canada Interest Rate Announcement - July 15, 2020
The Bank of Canada held its overnight rate at 0.25 per cent this morning, a level it considers its effective lower bound. In addition, the Bank is continuing its quantitative easing program, committing to large-scale asset purchases of at least $5 billion per week of Government of Canada bonds along with continued purchases of provincial and corporate bonds. In the statement accompanying the decision, the Bank noted that the economic outlook remains extremely uncertain, but global economic activity is picking up. Financial conditions have improved, oil prices have rebounded, and pent-up demand in the Canadian economy has lead to a bounce in output and employment. The Bank expects that the Canadian economy will contract close to 8 per cent this year, but will build momentum into the second half of this year, leading to the economy growing 5.1 per cent in 2021. The Bank further noted that the economy will require extraordinary monetary policy support and the Bank will hold its policy rate at its effective lower bound until slack in the economy is absorbed and inflation has returned to its 2 per cent target.
Like the Bank, BCREA is projecting that the Canadian, and BC economy will start to recover in the third quarter. Positive signs of recovery are emerging in the housing market, with sales in BC recovering their pre-COVID-19 level in June. With the Bank committing to holding its policy rate at 25 basis points until slack in the economy is absorbed, and continuing its quantitative easing program of asset purchases, Canadian mortgage rates should remain at current historical lows for quite some time, providing a significant boost to the BC housing market.
COVID-19 Reopening Dashboard
The BCREA Economics team has created the COVID-19 Reopening Dashboard to help REALTORS® monitor the evolution of the BC economy as the province gradually reopens. This dashboard focuses on the sectors and activities that have been most significantly impacted by the pandemic and the province's subsequent state of emergency.
To monitor the province's progress toward a "new normal," we benchmark each indicator to February 2020, the month before the pandemic was declared. This dashboard will be updated each month.
Click here for the dashboard. https://www.bcrea.bc.ca/economics/covid-19-reopening-dashboard/
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.
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