February stats released by the Vancouver Island Real Estate Board (VIREB) indicate that volume and prices are down slightly compared to February 2012. The average price for a single family home in the Cowichan Valley decreased to $335,372 this year from $342,832 last February, a small decline of two per cent.
The number of homes sold dropped to 32 from 34. On a 12-month year-to-date basis, prices are also down two per cent compared to the 12-month average a year ago — to $342,533 from $350,065.
Volume is down 10 per cent. Five hundred and forty-four homes sold in the latest 12-month period, compared to 602 homes sold in the 12 months ending last February.
Since September 2012, the average 12-month price has trended between $340,000 and $345,000 for a single family home. The 12-month average statistic is a better indicator of price and volume trends than a month-over-month change. It smooths out the drastic swings in average prices that can happen in the short term caused by home sales outside the normal range of prices.
In terms of market balance, for single family homes, it is a buyer’s market.
As a rule of thumb, the residential real estate market is balanced when there is six months of inventory. Less than six months’ supply is a seller’s market, and more than six months’ supply is a buyer’s market. The number of months’ supply is determined by dividing the active listings by the units reported sold. In February, there were 411 single family active listings and 32 sold, so the inventory level sits at 12.8 months’ supply. In other sectors of the market, inventory levels are higher. For lots, the inventory sits at 74 months, and apartment condos have 33 months’ supply, while patio homes and townhouse condos have around 17 months’ supply.
Sales locally for single family homes were similar to a year ago.
In Ladysmith, five homes sold in February at an average price of $329,000. Last February, six homes sold for an average of $315,000. In other local markets, the activity was fairly quiet. Two homes sold in Chemainus for $197,500, and nothing sold in Saltair or Crofton. These numbers exclude private sales and waterfront homes.
In any type of market, there will always be buyers and sellers. The market is created when a buyer and seller agree to a price that is mutually beneficial. In the local market, sales are happening. Buyers have a good selection of inventory from which to choose. Sellers need to be informed as to what has sold and what is listed that is comparable to what they are trying to sell. The No. 1 factor that drives a sale is price, followed by location, condition and competition. Therefore, it is important that sellers price their home competitively if they want to attract buyers and complete a sale. A realtor has expertise in all the factors driving the local market. Get one working for you, whether you are a seller or a buyer, and realize the benefits a realtor brings to the transaction.
Tom Andrews is a local realtor in the Cowichan Valley with a focus on the Chemainus, Saltair and Ladysmith markets. He has been coming to Vancouver Island since 1968 on business and as a visitor. He and his wife Heather married in the Malahat in 1996 and then moved here permanently in 2006. He will be writing a monthly column about local trends and offering tips to buyers and sellers. Tom works for Coast Realty in Ladysmith and can be reached at 250-245-0545 or tandrews@coastrealty.com. Comments and questions are welcome.