Happy New Year!
As we venture into 2013, we thought it would be a good idea to review what happened in the Victoria Real Estate market last year and try to predict what the market will bring this year.
The Real Estate Market
Review Of 2012 And Predictions For 2013
Prepared By Team Jeffs
Note: The following comments are based on the CMHC housing market reviews and best guesses, VREB statistics and annual sales data, as well as from several economic reports prepared by the Charted Banks in Canada. Many of the opinions herein derive from being actively involved for many years in this exciting business called Real Estate.
Real Estate Values: Historical Overview
The economists who are prognosticating the health and potential of the 2013 Real Estate market are quite naturally using the sales activity statistics of the past 5 years. While they are trying to summarize their results using this brief snapshot of time, they may be overlooking the long term picture. Perhaps the study should reflect on the past 50 or more years of sales values which clearly shows the tremendous returns from investment in Real Estate. In many cultures even a 50 year period would be an insignificant drop in the time continuum bucket in that they plan for generations ahead when it come to making decisions for acquiring property. Real Estate as a long term, safe investment has been well substantiated over time and we believe will continue to be into the future.
Specific Review and Predictions
The scope of the Global Economic Crisis of 2008 hasn’t been seen since 1929 when it led to the devastating Depression Years. This time however, with Government intervention and subsequent bailouts, the results although severe were somewhat controlled. Real Estate was certainly impacted through this event particularly following, which many now say was an unsubstantiated inflationary boom of 12 years. Severe corrections in pricing for housing hit many areas of the USA, but in Canada we have seen corrections however less dramatic due safer banking rules.
The following points are condensed comments on how 2012 continued to be affected and what we may expect for 2013. Attached are links to more detailed information.
2012 In Review
- The total sales in 2012 were only marginally less than in 2011, and 22% below the average level of sales recorded over the previous 10 years.
- B.C.Assessment Authority for the second consecutive year lowered the assessed value of homes in our region approximately 4 to 6% which is in keeping with actual values.
- It continues to be a market favouring the buyers, however many of them are taking a “wait and see” position awaiting any possible price reductions.
- Mortgage rates have remained at their historically low levels which has encouraged many buyers to choose buying over renting, mainly in the Westshore areas due to the available and affordable housing. A mid year tightening of CMHC lending rules has however cooled this market slightly.
- The total sales including all property types reached 5,747 through VREB which was down marginally from 2011, but proving that there is still good activity when properties are priced fairly to the current market.
2013 Crystal Ball
- The economy of B.C. overall is healthy leading us to believe that the Real Estate market, while non-inflationary, will remain active in Greater Victoria.
- The low mortgage rates will likely creep upwards in the last quarter of the year but not significantly.
- An investment in Real Estate, especially a personal home, will remain a good solid choice for most buyers seeking long term security.
Summary
We have great confidence in the Victoria Real Estate market for 2013 and beyond and would like to wish everyone a Happy and Prosperous New Year!
Reference Links:
CMHC Housing Market Outlook – http://www.cmhc.ca/en/hoficlincl/homain/index.cfm
Victoria Real Estate Board Statistics – http://vreb.org/mls_statistics/index.html
House Hunt Victoria – http://househuntvictoria.blogspot.ca
teamjeffs 