A slow start to the year may have the Victoria Real Estate Board reconsidering its position that the region’s property market could see modest growth in 2013.
Based on a forecast from economist Cameron Muir at the B.C. Real Estate Association, the local board had anticipated a “modest” increase of between two and four per cent in sales activity this year.
But poor sales in January and February may jeopardize that forecast.
“They are definitely not great numbers,” said Shelley Mann, president of the Victoria Real Estate Board. “I would say if we don’t see substantial growth in March and April we may have to re-evaluate.”
Mann said the region historically sees the highest volume of transactions and activity in March, April and May. By the end of that stretch, they will know where the market stands.
The figures released by the board Friday show February’s sales, while an improvement over January, dropped 18.3 per cent compared with February 2012.
Last month, there were 394 sales in all property types, down from 497 in February 2012. There were 294 sales in January this year.
Year to date, the board reports 688 total units sold, down from 869 sold over the course of the first two months of last year. In that time, total sales in dollars dropped to $305 million from $399 million in 2012.
Mann said January and February are always the toughest months, but she said there are signs of life yet in the market.
“We have seen sales numbers increasing over December, January and February,” she said. “there has been increased activity, though it may not be [reflected] in the numbers right now. But I do see a lot more optimism now than I did a month ago.”
Mortgage broker Scott Travelbea said he’s seen some of that optimism at his offices.
“I’m getting people in for pre-approvals,” he said, noting while that is normal for this time of year, there’s been a noticeable increase in volume.
“This week alone, we have had 10 new applications come through the door to get pre-approved. As far as new deals are concerned, that’s quite a bit of activity.”
Travelbea did say tighter lending rules have had a ripple effect through the market.
With first-time buyers having more difficulty getting in, it has slowed condo sales, meaning condo sellers have had more trouble using their equity to move on to a single-detached home.
Mann said while sales activity may still be weak, prices have not reduced substantially.
Last month, the median sale price of a single family home was $505,500, down from $530,250 in February 2012, though it was an improvement over the median price of $482,500 recorded in January.
The median price of condominiums dropped to $270,500 from $276,250 in February 2012. It is much improved from the median sale price of $238,350 recorded in January.
The median of townhomes was $337,500, which is down from $378,450 in the same month last year and from the $382,000 in January of this year.
“Many buyers are still waiting for prices to drop, but it’s clear to me that sellers are in a holding pattern regarding the value of their homes,” Mann said.
“However, if a house is priced properly, within the market-value range, it will likely sell more quickly.”