Below is a summary of MOI (months of inventory) statistics for SFH’s in Victoria using March sales numbers and MLS inventory from March 30 2009. I have also provided a comparison to February 2009 and March 2008 (using quarterly data given lower sales volumes). My sales breakdown by price is estimated using medium and averages but any errors in this will not be material enough to distort the overall trends shown.
In March 2009, the statistics showed that sales for SFH’s under $500k were actually UP about 10% across Victoria. But if you just look at Victoria, Oak Bay and Saanich East which contain the more desirable places to live, sales in March 2009 were UP over 50% from March 2008. Now today you may get a slightly better house for $500k than last year, but a 50%+ increase is truly amazing given we are facing the worst recession since WWII and last year this time we were still in the greatest real estate bubble of modern time and few people were concerned about losing their job.
The current MOI data for Victoria, Esquimalt, Oak Bay and Saanich East are at or under 1.0. This would indicate a very strong seller's market. Combine this with much higher sales in these regions; new listings that are priced right are obviously selling, which is likely why we are not seeing inventory levels increase at the lower prices.
In contrast, above $650k, each area of Victoria has seen sales volumes drop between March 2008 and March 2009 while MOI numbers have increased. Last year on average it was a buyer's market, but a balanced market in the more desirable areas. Today we are seeing a buyer's market in all regions of the city at the higher price levels. Once you get above $800k, things get really ugly (from a seller’s perspective) everywhere.
So today you do not appear to have a balanced market anywhere as the VREB suggests, but rather a unique dichotomy where you have a very strong seller's market at the low end in the desirable locations and strong buyer's market at the higher end. How long can this dichotomy last? Will the higher priced home sellers drop pricing and push down the market? Do these mid to high priced sellers hang onto their price expectations as they see how hot the low end of the market is?
Given what I see in these statistics I am not overly optimistic we are going to see prices of the lower priced homes dropping soon. I know that my wife and I are in a wait and see pattern and based on what happens we will go after amore expensive property or look to buying elsewhere in the province.