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The Canada Mortgage and Housing Corporation just released a report on housing starts in Canada.  As expected, the pace is slowing.  Here is what they have to say about British Columbia.
At the provincial level, British Columbia’s housing starts, which have been above historical averages, will decline in 2008 and 2009. A tight labour market, robust income growth, and high levels of consumer confidence will partially offset the dampening effect of rising mortgage carrying costs on the demand for new and existing homes in British Columbia. Housing starts will decline to 34,700 units in 2008, and 32,900 in 2009 from 39,195 units in 2007. The average MLS® price in British Columbia will grow by 9.3 per cent in 2008 and 3.3 per cent in 2009. This moderation is due to an increase in listings and fewer existing home sales bringing more balanced supply and demand conditions to market.
You can access the complete report by clicking here.
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If you talk to enough people in this profession you'll hear about an interesting phenomenom.  It doesn't have a name, but for now I'll call it the "Buyer / Seller Disconnect." 
 
What's happening is that often buyers and sellers have a different, and diverging, opinion about what's going on in the market.  If you are currently planning a purchase you already know that most buyers live and breath real estate 24 hours a day while they are planning a purchase!  Buyers know their neighbourhood of interest very well, and are closely in touch with the ebb and flow of pricing.  An energetic buyer probably knows more about the immediate market conditions in a specific area than many Realtors.  If a buyer hears that the market is softening they latch onto that information and possibly even over emphasize it in their mind.
 
Sellers, on the other hand, are often not as informed.  I'm not knocking sellers, just suggesting that often a seller relies on their listing realtor to set a selling price for their home and then hopes for the best.  While buyers may believe too strongly that the market is flat, or dropping, sellers have a very strong memory of past news articles talking about skyrocketing housing prices. 
 
Can you see the challenge that is emerging?  Buyers believe that the market is dropping and that they can offer a low price that sellers would be smart to take.  Sellers believe that they should turn down an offer less than full price and can just hold out until someone offers them full value.   Keep in mind that I'm generalizing here and this, of course, doesn't apply to every situation.
 
The net result of this disconnect is that in the last couple of months we are seeing many more parties simply not coming to an agreement on a purchase price and terms.  This isn't in the best interest of buyers or sellers!
 
If I could be so bold as to make a reccommendation I would have a few comments for all parties.  Realtors, first of all, need to make sure that they put a lot of effort into coming up with a sharp listing price for a property.   They also need to keep in regular contact with their selers about how the market is changing and not be afraid to discuss price drops when necessary.  Sellers could benefit greatly from the knowledgeable advice of their Realtor.  If I was a seller I would also work hard to gather as much market information about my neighbourhood as I would if i was a buyer.  Don't just focus on the news "feels good."  Learn everything that a buyer would learn.
 
Finally, for buyers, yes, the market is becoming more balanced.  Inventory is up and properties are often not selling as fast as they were last year.  But, the best priced properties are still selling quickly so be ready to act fast.  If you are going to put in a low offer, keep in mind that sellers may not see the market the same way that you do.  You may need to negotiate a little longer and be a little more persistent to get the deal you want.  Don't give up to quickly or you just may miss that special property!
 
 
 
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Those of you that know me, know that I am quite involved in supporting the community.  One of the reasons that I chose to join RE/MAX is that I wanted to work with like-minded people.  For example, a portion of every transaction that I'm involved in is donated to the Children's Miracle Network.
 
RE/MAX also helps grow our community in a number of other ways.  Just this week the Western Canada group of franchises awarded 24 bursaries totalling $12,000.
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Today the April real estate sales data for Victoria was released.  I was eager to get my hands on it and perform my own analysis.  Instead of just comparing month by month, I'm more interested in the trends that are appearing. 
 
As you can guess, the market is softening in the Greater Victoria area.  The number of units sold in both single family homes and condo's is down by 10% and 16%, respectively.  Please note that my figures come from a three month average compared to the same three months last year to smooth out single month anomalies.  Townhouses are bucking the trend and still showing a slight increase over last year.  The common belief is that down-sizing baby boomers are driving the townhouse market upwards.
 
Although the median price is still increasing for all market segments, this can be misleading!  Several higher end sales are pushing up the single family median price.  Of course, construction and renovation costs are playing their part.  The median condo price is being pulled up by sales of new construction.  When we look at prices of individual units the picture is a bit different.  Pricing is very sensitive!  Inventory has increased significantly and so overpriced properties are not selling. 
 
Here's a little more on inventory.  Each year, we expect inventory to increase at this time of year.  It is cyclical and happens because more people decide to sell their home in the Spring.  The maximum number of listings is usually reached in June or July.  This year, again using the 3 month average, the number of properties available for sale is 14.5% ahead of the same period last year.  That's a big increase.  However, our market is fairing much better than many others.  Have a look at the Calgary real estate market and you'll see a much bigger increase in inventory.
 
If you are selling your home you had better make sure your pricing is right on.  Well priced properties continue to sell quickly.  There are lots of great examples of this.  But, buyers know that the market it tilting in their favour and will pass by overpriced homes.
 
If you are a buyer, you've got a great opportunity.  There are lots of homes to choose from and you may be able to get a better deal than you could a few months ago.
 
Would you like to hear more?  If so, sign up for my newsletter.  Besides other useful information, you'll get my quarterly market analysis.  Simply put, you can always count on me to give you the straight, unvarnished facts.  My clients find the information very useful and I'm sure you will as well.
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MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.