Month-to-date sales statistics, courtesy of Marko Juras, REALTOR®:
September 2010 (2009 September totals in brackets)
Net Unconditional Sales: 118 (776)
New Listings: 466 (1,129)
Active Listings: 4,181 (3,419)
Sales to new listings ratio in the first 13 days of September 2010 is 25%. Typically this number has been above 40% for each month this year. We may yet get there. Current average price, if it holds, would set a new record for Victoria at $658,329. It's important to understand this number is basically meaningless because of the extremely low sales volume. Much the same as last month's SFH average price, when used alone, is basically meaningless, although it pointed to a continued downward trend in prices. We know from aggregating 20 or more pending sales that the homes that are selling are not selling for asking price, but we also know that very few homes, and especially very few of the low-end homes are selling.
Over the coming weeks and months we will hear from the usual sources (defined as those who make a living directly off real estate transactions and products) that a buyer's market presents a great time to buy a house. I'd like to say that a buyer's market usually provides a better opportunity to purchase a home without the added pressure of a seller's market, but do not kid yourself for one minute thinking that the market today presents a great buying opportunity. Affordability still sucks, prices are still grossly inflated against incomes and rents, and the current market conditions are only beginning to seep into mainstream thought - as in you're only starting to hear about the dearth of sales at dinner parties.
When you go to a dinner party and the consensus opinion around the table is you'd be crazy to buy a home, prices have been falling and there's no end in sight, I know three couples who have lost their shirts in real estate etc, there's your buying opportunity.
For now, buyer's market and seller's market are just marketing speak. It's a spun way of telling you where months of inventory stands. Under four months of inventory is considered seller's market territory. Prices usually rise. Between four and six months of inventory is considered a balanced market. Prices will usually bounce around but remain mostly flat. A buyer's market is when we have six or more months of inventory. At the end of August 2010, the VREB area reported over 9 months of inventory. Prices should fall for as long as this number stays higher than six. Why would you buy today when prices will likely be cheaper tomorrow? The usual suspects will tell you that you have no way of knowing for sure that prices will be cheaper tomorrow. You can say sure, but the likelihood of falling prices is far greater than rising prices.
Oh, and when they tell you real estate always goes up, tell them to have a look at prices in Japan since 1991. When they tell you we're not Japan, tell them just last month they were telling you we live on an island with a limited supply of land and an aging population who wants to be here.