Our local real estate market continues to favour sellers with a shortage of inventory and plenty of multiple offers. Even with a potential mortgage interest rate hike on the horizon, demand is continuing unabated.
Single family homes continue to lead the market with more than half of all homes selling over the asking price. In the under $1M price range, more two thirds of all homes sell over the asking price. Another important statistic that we track internally is how many months of inventory is available. That figure is shockingly low at 0.9 months, meaning that during each month more than the total number of homes available will sell. To put this in perspective, in the past it was normal to have 6-8 months of inventory available. No wonder buyers are having such a tough time finding a home! Prices are on the rise as well. Although the Home Price Index calculates that prices are up 10.8% from last year, in many areas of Greater Victoria that increase is closer to 14-17%.
The condo market is also picking up steam. Over the last year, as single family home prices moved sharply upwards, condos were left behind and a pricing spread developed. Now, buyers who feel that house prices are out of reach are turning their thoughts to the benefits of condo life, causing this market segment to accelerate. Our internal research shows that the absorption rate for condos has doubled in the last two months, multiple offers situations have increased, and pricing has started to rebound from the dip created by the pandemic. The condo market is still a bargain compared to houses, but may not stay that way for long. If you are considering a condo, now may be the best time to make a purchase.
Looking to the future, we are watching bond yields very closely since they have a direct effect on fixed term mortgage rates. Those yields are now at a fifty-two-week high and this has already started to push mortgage interest rates up. Although variable rate mortgages are not directly affected, if you are considering a fixed rate mortgage, now would be a good time to call your lender to lock in your rate.
If you would like to discuss these ideas in more depth, please feel free to give Karl Leong or Mark Roozendaal a call. We are here to help you make sense of this changing market.
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