Region's real estate shows signs of cooling

Strong sales to start the year defy national trend, but listings are growing

Carla Wilson, Times Colonist
Published: Wednesday, April 02, 2008

Greater Victoria home sales have climbed each month this year even though national sales numbers for existing homes have slumped.

In Greater Victoria, 707 properties sold last month, up from 619 in February and 464 in January. However, March of this year trailed the same month in 2007, which had 833 sales.

Nationally, sales of existing homes were down 5.6 per cent to 38,365 units in February compared with a month earlier, the Canadian Real Estate Association said yesterday.

Month-over-month sales eased in British Columbia and Alberta.

"Market balance for resale housing is evolving differently among provinces," said CREA chief economist Gregory Klump. "British Columbia and Alberta are quickly becoming more balanced as higher prices pinch sales activity and new listings rise."

The CREA report said more than half of the seasonally adjusted monthly decline was the result of fewer sales in Toronto. However, the average price in B.C. climbed to its highest level on record at $478,172, up 15.8 per cent from February 2007.

"Overall, the report highlights the moderating pace of housing activity in Canada which will bring the level of activity to more sustainable levels," said Millan Mulraine, economics strategist at TD Securities. "At the same time, the Canadian housing sector remains in much better shape than its U.S. counterpart."

North of the Malahat, the Vancouver Island Real Estate Board said there were 383 single-family house sales in March, up from February at 369, but lower than March a year ago when 511 properties changed hands.

Dunnery Best, managing director, portfolio manager and investment adviser with CIBC Wood Gundy in Victoria, said the subprime housing crisis in the U.S. has led to tighter lending standards everywhere, including Canada.

"You have to come into a transaction being in pretty strong financial condition," said Best.

Ultimately, he expects prices to slow locally.

Inventory has gone up as well. The total number of properties for sale in Greater Victoria last month through the Multiple Listing Service was 3,591, up by 17 per cent from March of last year, the Victoria Real Estate Board said.

"With more properties available for sale, buyers now have a greater choice, but the continued demand for homes and steady prices mean sellers can anticipate strong interest in properties that are realistically priced," board president Tony Joe said.

The record for active listings was set in May 1998 with 4,567 properties.

In Greater Victoria, the average price for a single-family house rose month-over-month to $597,176, up from $587,295 in February, the board said.

The local record high was set in December at $624,450, an average skewed by several multimillion-dollar homes.

However, the median, or midpoint, price for a house in March was $529,625, below the February median of $543,500.

Joe said that 28 per cent of single-family homes sold for less than $450,000, and close to 36 per cent of condominiums sold for less than $275,000.

The average price for a condo in this region last month was $328,734, and the average for townhouses was $458,378, the board said. March sales included 407 single-family houses, 170 condos, 68 townhouses, and 16 manufactured homes.

The Vancouver Island Real Estate Board said the average sale price was $338,846 last month, down from $346,795 in February.

-- With files from CNS