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• Comox Valley Realty Market Early 2011

 
As we close out January 2011, there are some positive signs for the real estate listings for the entire Comox Valley market. The BC Real Estate Association is forecasting an increase in home sales this year and some analysts are forecasting movement towards a more neutral market. Canadian and America economic indicators are both important given how intertwined our two economies are (nearly 85% of what Canada exports goes to the US and nearly 25% of what the US exports goes to Canada). We are each other’s most important single trading partners. Interest rates, mortgage rates, and consumer confidence are all important elements of a healthy market.

While some experts discuss a move to a more neutral real estate market we are too early in the current Comox Valley real estate market cycle for this to happen locally. More likely is a continued home buyer’s market. As a Comox Valley realtor who works this market each and every day, we have not seen anything to justify a move from the Comox Valley home buyer real estate advantage we see currently. Real property is not selling well and oceanfront and high end home sales have diminished significantly. Comox  Valley home sellers still can succeed in this real estate market if their homes are correctly priced and properly presented. There is increased pressure to sell but far fewer buyers making the real estate commitment necessary for home sales to increase. Real estate prices have stayed fairly stable at this point in the Comox Valley real estate market cycle.

Sign up for the free Private Client Services Pro service of my website to keep your finger on the pulse of our Comox Valley realty market. Contact Brett Cairns of RE/MAX Ocean Pacific Realty for updates on the current realty market.

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• Where is the Comox Valley Real Estate Market Headed in 2011?

The entire Comox Valley homes estate market market peaked in 2007 but then began a marked decline the following year. What happened? The Canadian Real Estate Association (CREA) revised its 2011 forecast for home sales activity on the 8th of February 2011. Nationally residential sales were forecast to drop by 1.6% compared to the previous year (439,900 sales in 2011 compared to 447,010 in 2010). For British Columbia sales were forecast to drop by 2.9% (72,500 in 2011 compared to 74,640 in 2010). At the same time average prices were expected to rise nationally by 1.3% while those in British Columbia were expected to rise by 3.0%. The press release added that “The Comox Valley housing market and buyer psychology is different now than it was at the beginning of last year, so buyers and sellers would do well to consult their Realtor to understand local market conditions”. While these statistics were interesting they did not reflect what was happening with the Comox Valley.

On the 15th of March, CREA stated that national resale housing activity in February 2011 was close to the five-year average for the month with actual sales activity down 5.9% from the levels reported last February. The press release added that national average prices rose 8.8% but that this figure was skewed by a record number of multi-million dollar sales in Greater Vancouver.

The British Columbia Real Estate Association, on 23 February 2011 forecast an increase in sales by 8% in 2011 (80,900 in 2011 compared to 74,640 in 2010). This forecast was based on projected employment and population growth that would fuel increased consumer demand. It is interesting to note the qualifying statement that followed – “higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the 10-year average of 87,600 units. Nothing was said of the influence of the Vancouver market.

On 14 March 2011 BCREA mentioned the Vancouver market stating that sales were up 8% in February 2011 compared to the previous year and that prices were up 18%. So, CREA forecasts a drop in sales for BC of 2.9% while BCREA forecasts an increase of 8%. But what about the Comox Valley real estate market and where is it headed for 2011?

On 2 March 2011 the Vancouver Real Estate Board discussed its statistics and stated “To effectively analyze real estate statistics for the purpose of buying or selling a home, it’s critical to focus on your neighbourhood of choice because, like we see today, conditions and prices can fluctuate significantly within the same city or municipality.” This statement is particularly relevant if, for example, you were focused on buying a home in the Comox real estate homes segment of our Comox Valley market.

Closer to home the Vancouver Island Real Estate Board (VIREB), on 1 March 2011, stated that total sales decreased by 3% in February 2011 when compared to the previous year. Clearly, there are some differences in forecasts. What is clear, however, is that real estate, like politics, is local.

Real estate statistics for the nation, province, island, and local community can vary for good and valid reasons. Before using any of these statistics as a benchmark for decision-making it is best to consult with a local real estate professional who knows the local market and how to analyze it. For example, last year in the Comox Valley there were substantially different sales to listing ratios for homes in the below $300,000 price range and those in the greater than $700,000 price range. I did an analysis of 2010 statistics for the Comox Valley that I share with my clients when they are considering buying or selling a home in the Comox Valley.

Ask your Comox Valley Realtor ® to discuss factors such as time on market data, price-level listing to sales ratio differences, and local neighborhood differences with you before making important decisions on buying or selling a home. While many different factors contribute to activity and prices in a given market, it often comes down to what buyers are willing to pay.

There is a great deal of information available to REALTORS® in the Comox Valley. The key is ensuring relevance and applicability to a specific situation. If you would like to know the market price of your home in the Comox Valley contact Brett Cairns of RE/MAX Ocean Pacific Realty. He can make effective use of the resources that are available to provide you the information that you need to help you buy or sell your home in the Comox Valley with confidence.

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• How is the Comox Valley Real Estate Market Approaching the Fall?

The Comox Valley Real Estate market is rapidly approaching the fall of 2011. What will happen to it as it does? Summer 2011 is nearing its end, and we are rapidly approaching the fall season in the Comox Valley. As we do, what is happening with our Comox Valley real estate market?

To answer this question, let’s start by looking at some forecasts. On 16 Aug 2011, the Canadian Real Estate Association (CREA) stated that national resale housing was stable, and in line with the 10-year average. CREA revised their BC 2011 sales forecast slightly higher in recognition of homes sales appearing to have bottomed out sooner than anticipated. The British Columbia Real Estate Association (BCREA), on 25 Aug 2011, announced that while residential sales are forecast to increase by 3.8% in 2011, and a further 3.6% in 2012, overall sales will remain below their 10-year average through 2012.

To put the BCREA forecast in perspective, their 15 June 2011 press release stated “BC Home Sales Edge Lower in May”, their 14 July 2011 press release stated that homes sales were relatively unchanged in June compared to last year, and their 11 Aug 2011 press release stated “BC Home Sales Edge Lower in July”. Their 30 Aug 2011 press release stated that the BC Commercial Leading Indicator Edges Lower in the second quarter of 2011 and mentioned some challenges to the BC economy that could lead to “softer commercial activity in the coming quarters”. This statement was balanced by one which stated that “an almost unprecedented decline in long-term interest rates may help to stimulate investment activity and soften the impact of slower economic growth”. Even against this backdrop, BCEA forecast the growth in home sales mentioned in the second paragraph above.

Having mentioned interest rates, where are they headed? Cameron Muir, the BCREA Chief Economist had earlier predicted steadily increasing interest rates throughout 2011 and 2012. In the 16 Aug 2011 press release, Gary Morse, the CREA president mentioned discussion of potential rate increases, but he added that interest rates have actually come down and are expected to remain low for the remainder of the year. Time will tell which organization is correct but one thing is for sure – mortgage interest rates are at or near historical 50 year lows.

Let’s now turn back to current Comox homes listings. According to the Vancouver Island Real Estate Board (VIREB), the average selling price of a single family Comox Valley home was $347,383 in Aug 2011 compared to $325,369 one year ago. This average price for the last six months is similar to the spring/early summer of 2010 (six month period). Another pertinent statistic is the number of days to sell in August. For single family homes in the Comox Valley this increased from 66 days last year to 93 days this year. While these statistics may provide some sense of where the market is headed, they are not sufficient for decision-making in any specific circumstance. Contact me if you would like to discuss your specific circumstances concerning Comox Valley real estate and I will be pleased to help and answer your questions.

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• Comox Valley Real Estate Market Prices and Sales

Comox Valley Real Estate market prices and sales are often followed statistics. By definition, statistics involve the organization, analysis and interpretation of data. The Vancouver Island Real Estate Board (VIREB) collects and organizes data for home and property sales in the Comox Valley. But who analyses the data and then interprets it for the home buyer or seller? Some Comox Valley real estate agents do this.

As with any data, statistics can be meaningful or they can be dead wrong. It depends on how they are used, and within what context and situation. Let’s briefly discuss an example. Often newspapers will report on the average sale prices of homes within a particular area in order to make some point about a real estate market. However, within the context of a Comox Valley neighborhood, median sales prices are more relevant. What is the difference?

Average sale price is just that – a mathematical average of the prices of Comox Valley homes that sold in a specific area over a specific period of time. For example, consider the following sale prices of 10 homes (expressed in thousands of dollars): 200, 225, 235, 245, 250, 255, 260, 340, 400, and 600. The average sale prices is $301,000.

The median sale price is based on the middle price in a list of sales prices when there is an odd number of sales, and the middle pair of prices in a list of sales prices when there is an even number of sales. Since we have 10 homes, we find the middle pair. The highest price of the five homes at the bottom of the price range is 250 and the lowest price of the five homes at the upper end of the price range is 255. the middle pair is 250 and 255 so the median is the average of the two at $252,500.

Clearly, there is a large difference between the average and median prices for this list of homes. The average price is much higher because of the influence of the two higher priced home sales. In a neighborhood where only a small number of homes sell, the average selling price may not be that relevant if there is a wide range between the prices. The median price is more representative of the more typical selling price. A rise in median price may mean that the market is strengthening, but it also may mean that homes priced in the lower end of the market are selling and leaving the market. This is where analysis and interpretation is important.

Another statistic that is often used is “Days on Market”. This figure tells us how long all active listings, in aggregate, have been on the market. “Time to Sell” refers to only those properties that actually sold. What happens when a property enters and leaves the Comox Valley property market?

Consider a home for sale that was on the market for 100 days and did not sell. It was taken off the market and placed back on again a month later. It was on the market another 120 days and did not sell. It was taken off again, its list price reduced and put back on. It sold in 34 days. Was the “Time to Sell” 34 days or 254 days? Also, how did this relate to the median time to sell versus average time to sell for the neighborhood?

Speaking of sales, let’s consider the following examples. Home one is placed on the local city real estate market well above market value, stays on for 120 days and does not sell. Home two is placed on the Comox real estate market above market value, the price is reduced after 30 days and it sells in 50 days. Home three is placed on the Cumberland real estate market just below market value and it sells in a week. No buyer is found for home one, a real estate agent other than the listing agent finds a buyer for home two, and the listing agent had a buyer for home three before obtaining the listing and the buyer made the seller an offer shortly after the listing contract was signed. The point to be made here is that it is important to understand the circumstances in order to interpret what actually happened and why.

To summarize. To properly analyze and interpret statistics, it is important to understand the market, the neighborhood of concern within the market, and the circumstances of a specific situation. To do anything less increases the risk of dealing with a less than meaningful statistic.

This blog just touches on how statistics can provide buyers and seller meaningful information, or not. Proper analysis and interpretation of the data is required if the statistic is to be meaningful in a specific circumstance. If you are a buyer or seller in the Comox Valley real estate market or you are considering buying or selling in this market and want to know more about the type of our real estate market and a specific neighborhood, contact me. I would be pleased to discuss your Comox Valley real estate information needs with you and provide you with meaningful information that will meet your needs. I would also like to hear from you. What real estate market statistics are most important to you as a buyer or seller? Join the discussion and post a comment on my Facebook page. Click on the discussions tab. Contact Brett Cairns of RE/MAX Ocean Pacific for a good understanding of the Comox Valley real estate market.

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• Comox Valley Real Estate Market Wrap up 2011

The regional district real estate market has slowed down with less than a month until Christmas. Many people will soon start to prepare for the festive season. Therefore, I believe that it is useful to provide a recap now of what happened in the Comox Valley Real Estate market this year. I will also provide my sense on the upcoming year, from a real estate perspective.

Before discussing what happened this year, let’s briefly recap what led us to the current real estate market environment. As you may recall, U.S. housing prices peaked in early 2006. This peak was followed by increased foreclosure rates in 2006 and 2007, and sharp declines in prices. The 2007 sub-prime mortgage crisis had its roots in falling home prices, and it was one of the first indicators of a larger financial crisis in the U.S. in 2008 that led to, among other things, unprecedented intervention by the U.S. Government. At the time, the International Monetary Fund called the US predicament the “largest financial shock since the Great Depression.” In December 2008, the Standard and Poor’s Case – Shiller home price index reported its largest U.S. housing price drop in history. According to a recent U.S. Census Report, the number of U.S. homeowners that moved between March 2010 and March 2011 was at an all time low. Many homeowners currently either cannot sell or don’t want to sell given the drop in home prices.

Global concerns over the U.S. situation in 2008 led to a tightening of credit around the world. While Canada’s economy did better than many countries, it too, felt the impact of the global economic slowdown. By the summer of 2011, the world was starting to feel the impact of other concerns related to the Greek Debt crisis, and the financial stability of the European Union.

Within Canada, overall homes sales peaked in 2007. For the subsequent four years, the total number of home sales was near or below the ten year average. Within BC, British Columbia Real Estate Association MLS ® residential statistics show that sales actually peaked in 2005 at 106,290. In 2007, sales were down about 3% from this peak to 102,831. However, residential sales dropped by 31% in 2008 to 68,923 (down 35% from the peak in 2005). Sales rebounded to 85,028 in 2009, and then dropped to 74,640 in 2010. In 2011, sales are expected to finish at about 77,000. This is still 25% below 2007 and nearly 28% below the 2005 peak.

Let’s now take a look at the Comox Valley real estate market and Comox Valley home sales. In 2007, Vancouver Island Real Estate Board statistics showed that there were a total 1054 single family homes sold. This number dropped 30% to 734 in 2008, was up slightly to 770 in 2009, and then down slightly to 724. Year-to-date in 2011 (through Oct) is 635. The total in 2011 should come in slightly above last year but still nearly 30% below the 2007 total. When we look at the combined total number of single family homes, condos, patio homes, townhomes and duplexes, the statistics are similar. In 2001 there were 1645 sold compared to 1113 in 2008 (a 32% drop), 1053 in 2009, and 1005 in 2010. Courtenay listings of locally owned properties were down as were prices.

There are specific Comox Valley homes neighbourhoods and price ranges where the statistics are even more telling. Based on the preceding statistics, it should be clear that the 2008 financial crisis took its toll on the Comox Valley real estate market (either directly or indirectly). Given the number of homes that I saw come on the Comox Valley real estate market each week in 2011, I got a sense that some home sellers were not aware of the dramatic change in the market from 2007 to 2008 and how these changes are still being felt in 2011 to date. Some homes were priced to sell, yet others were listed above (and in some instances well above) the market.

Other real estate statistics are revealing. In December 2007, the average time to sell a single family home was 47 days. This figure rose from an average of 61 in 2007 to 73 in 2008 to 84 year-to-date. There were a number of months this year where this statistic exceeded 100 days. Another statistic that is noteworthy is the supply of homes on the market. In Dec 2007 there was about a 6.8 months home supply. This figure rose dramatically to 10.6 in Dec 08 (expected given the dramatic drop in home sales), it then sat at about 6.9 in Dec 09 and rose to 8 in Dec 10. During the summer months this figure has steadily risen from 4.7 in Jul 08, to 5.1 in Jul 08 to 5.7 in Jul 10 to about 6.6 in Jul 11. Locally owned Comox homes listed for sale were also similarly affected.

Clearly, there are exceptions to the picture painted by these general statistics, but the overall Comox Valley real estate market trends should be clear. The real estate market up to 2007 was significantly different than the market of today. Compared to then, the number of sales is down significantly, the time to sell is up, and the supply is up. Other conclusions could be drawn from sell to list ratios and list to sell prices but these types of analysis are best left to specific situations.

What, then, about the future? This is the “million dollar” question. There are currently conflicting views from economists across the country as well as those in the US about what the future will bring.

As a Comox Valley real estate professional who works in, and follows the Comox Valley real Estate Market closely, my sense is that 2012 will not be all that much different from 2011 given a financial climate that is comparable to that which exists today. For buyers, the Bank of Canada’s overnight interest rate is expected to remain low into early 2012, but it is also expected to start rising as 2012 unfolds. When it does, mortgage interest rates will rise making home buying more expensive. The Comox Valley property market should remain favourable to home buyers in early 2012.

What about sellers? Some parts of the Comox Valley real estate market will remain challenging to sellers as 2012 unfolds. Having said this, there are a number of things that can be done to help sellers in this kind of market. Price, preparation, presentation, and marketing will all be important elements. There are many other things that are important considerations as well that I cover when I present options to sellers.

Whether you are considering buying or selling in the Comox Valley real estate market, as a seasoned professional, I can help you. Contact Brett Cairns of RE/MAX Ocean Pacific Realty to get the most out of your next home purchase or sale in the Comox Valley and for peace of mind in this highly competitive real estate market.

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• Comox Valley Real Estate – 2011 in Review

With just over a week until the end of 2011 and less than a week until Christmas, it is time to review what happened in 2011 in British Columbia and the Comox Valley real estate market. Let’s, then, go back to the first of the year.

From the British Columbia Real Estate Association in 2011:
13 Jan 11 – BCREA reports that 2010 sales declined 12% to 74,760 units and that 2010 prices rose 8.5% to $505,178 (Title of the report was record home prices for 2010)
14 Feb 11 – BCREA reported that January residential sales were down 10 percent compared to January of the previous year.
14 Mar 11 – BCREA reported that February residential sales were up 8 percent compared to February of the previous year and commented that the surge in consumer demand in Metro Vancouver continues to propel the provincial stats higher.
18 Apr 11 – BCREA reported that March residential sales were up 11.5% compared to March of 2010 and commented that surging demand in Vancouver was overshadowing more moderate demand in other regions.
12 May 11 – BCREA reported that April residential sales declined 14% compared to April of 2010.
15 Jun 11 – BCREA reported that May residential sales were down 1% compared to May of 2010.
14 Jul 11 – BCREA reported that June residential sales were up 2.4% compared to June of 2010.
11 Aug 11 – BCREA reported that July residential sales were up 12.9% compared to July of 2010.
14 Sept 11 – BCREA reported that Aug residential sales were up 16.4% compared to August 2010.
14 Oct 11 – BCREA reported that September residential sales were up 8.8% compared to September 2010.
8 Nov 11 – BCREA revised it residential sales forecast to increase to 77,000 units in 2011 and 80,000 in 2012.
14 Dec 11 – BCREA reported that November residential sales remained relatively unchanged from November 2010.

Based on the above statistics, it should be clear that monthly residential MLS sales in British Columbia were up and down each month compared to the same month in the previous year. For the province, total 2011 sales were up about 3% from 2010, but they were still down about 14% when compared to the 10-year average (87,600 units), down 25% compared to 2007 (102,831) and down nearly 28% compared to the peak in 2005 (106,290).

Sales of a multitude of Comox Valley home listings were down nearly 30% from 2007. As well, time to sell rose steadily over the past three years in a number of categories.

Looking forward, what will happen in 2012? First, interest rates are forecast to stay low in 2012. Second, modest sales increases are forecast for 2012. Whether you are a Comox Valley home buyer or home seller in the Comox Valley real estate market, there will be opportunities for buyers and sellers who are prepared for the market that they will enter. Contact Brett Cairns of RE/MAX Ocean Pacific Realty for more information on Courtenay real estate listings or those from any other segment of the market.