Greater Victoria’s real estate market continued its strong pace in May as the average price of a single-family house rose to a record $763,517 and the number of properties sold blasted to a new high.
The latest average price in the capital region is up by 17.6 per cent from $649,431 a year ago.
It’s a seller’s market as buyers face rising prices and multiple offers in hot spots such as Fairfield, Oak Bay and Saanich East.
Benchmark prices, calculated by the Victoria Real Estate Board based on a “typical” house, also give a sense of what’s happening.
For the entire region, the benchmark was $584,700 in May.
For what the real estate industry calls the core — Victoria, Oak Bay, Saanich, Esquimalt and View Royal — it was $706,500.
The benchmark was lowest in the West Shore, at $460,500.
With its lower land prices, the West Shore has been the centre of a building boom as developers roll out single-family houses, often with suites to help with mortgage payments.
In the past month, 103 single-family houses sold for $1 million or more. Of those, 33 were in East Saanich and 24 in Oak Bay, the board said.
In a sign of the fevered market, some properties sold for tens of thousands or even hundreds of thousands of dollars above their asking prices, real estate agents said.
The number of sales was also up. In May, 1,289 properties worth a total of $748.6 million were sold through the Multiple Listing Service, compared with 905 in May 2015, and 1,286 this April.
A strategy is needed to buy in today’s market, said real estate agent Jane Johnston, of the Briar Hill Group with Re/Max Camosun. She is mentally preparing one client to “go into battle” next week, when a desired property is expected to come on the market. The client has been advised to have a deposit ready.
Buyers are increasingly looking at the suburbs where prices are lower, she said. A house worth $900,000 in the West Shore might sell for $2 million downtown, she said.
As for rising prices, Johnston said, “If two people who have very good jobs can’t afford a house, then the market is too high.”
And if prices climb too high, a market correction can be expected, she said.
Lack of inventory is creating a sense of urgency for buyers, Johnston said. Greater Victoria’s inventory of available properties is tight, with 2,406 properties listed for sale in May, down from 4,043 in May 2015, the board said.
“These are very interesting times in local real estate,” said Mike Nugent, Victoria board president. “There are influences in the marketplace that we do not fully understand yet, like the impact of out-of-town buyers and millennials moving into the market, and the seemingly sudden international attention our island city has started to receive.
“And some folks may be buying now because they are concerned that the market is going to continue to increase in value.”
Nugent looked at how many months it would take to sell all listings, at the current sales rate, if no new properties went on the market.
In May 2014, the months of inventory stood at 6.5 months. A year later, it was 4.5 months. It’s now at 1.9 months.
What this means is that prices could keep on rising, he said.
“It can be a challenging time to get into the market.”
The key is to be patient and consider looking at different neighbourhoods or types of housing, he said.
In the area north of the Malahat, sales of single-family homes increased to 771 in May, up from 527 in May 2015, the Vancouver Island Real Estate Board said.
The benchmark price for a single-family house was $364,500, up by 9.36 per cent from the previous year.