February 2024 Comox Valley Market Report

February 2024 Comox Valley Market Report

"Luxury Lane or Budget Boulevard: January's Diverse Home Sales in Review"

In this February Market Update:

  • Real Estate Quote of the month

  • Comox Valley January 5 yr. home prices

  • Interest rates

  • Inflation expectations

Quote of The Month:

"In real estate, you make 10% of your money because you're a genius and 90% because you catch a great wave." – Jeff Greene

Comox Valley January 5 yr. home prices

Examining January 2023, the Comox Valley real estate market maintained a consistent trajectory, likely influenced by the impact of rising interest rates. The lingering mortgage debt from the era of historically low rates introduces an element of uncertainty into future price trends. With mortgages from the previous low-rate environment now up for renewal at the new, higher rates, the market is undergoing a transitional phase. The implications of this renewal process on home prices remain not fully understood, creating a dynamic element that warrants close observation for its potential impact on our local housing market.

Shifting our focus to January 2024 transactions, a snapshot reveals a modest number of single-family dwellings (SFD) changing hands—only four transactions in total. Notably, two of these transactions exceeded the $1,000,000.00 mark, while the other two fell below $700,000.00. However, it's essential to exercise caution when interpreting these figures, considering the limited number of transactions that can distort averages and potentially provide a misleading representation of overall market conditions.

While the average price derived from these four transactions may imply a figure surpassing $1,000,000.00, it's important to recognize the necessity for a more nuanced perspective. The real estate market is diverse, encompassing various property types, locations, and dynamics, which collectively paint a more comprehensive picture. Therefore, due to the limited number of sales, the data was directly sourced from VIREB's database and includes the Islands, a deviation from my usual analyses where they are excluded.

Looking ahead to 2024, our dedicated real estate team is committed to closely monitoring evolving market trends. As we navigate through the year, timely updates will be provided to ensure you are well-informed and empowered to make sound decisions in the dynamic Comox Valley real estate landscape.

Quarterly topic: Interest rates unchanged for February

Bank of Canada wary of premature rate cuts as underlying inflation persists

OTTAWA (Reuters) -Members of the Bank of Canada's (BoC) governing council were concerned about cutting borrowing costs too soon amid persistent inflation when they decided to keep the key overnight rate on hold on Jan. 24, minutes published on Wednesday showed.

The policy-setting governing council was "particularly concerned about the persistence of inflation and did not want to lower interest rates prematurely," the minutes said.

The Bank of Canada (BoC) aims to keep inflation at 2% and has increased its key overnight rate 10 times in 17 months to a 22-year high of 5% to tame inflation.

Shelter price inflation, which includes mortgage interest costs, rent and components related to house prices, remained the biggest contributor to above-target inflation, the minutes said.

"Members expressed concern that, going forward, shelter price inflation would continue to keep overall inflation elevated," the so-called summary of deliberations said.

The governing council was worried that if the housing market rebounded more than expected in the spring of 2024, shelter inflation could keep inflation materially above the target even while other price pressures abated, the minutes said.

Canada's shelter costs, which account for over a quarter of its CPI basket, rose 6% in December year-on-year even as overall inflation figure came at 3.4%.

Governor Tiff Macklem, while addressing a press conference at the Montreal Council of Foreign Relations on Tuesday, said the BoC expects a modest increase in prices in housing in 2024 and that was built into its forecasts.

The minutes showed that the BoC was also fretting about increase in wages amid zero productivity growth, which could have further inflationary pressures. Wages have been growing between 4% and 5% annually.

"Members expected wage growth to moderate gradually," the minutes said.

The central bank also sees risk to growth as restrictive monetary policy could impact consumer spending and could case a marked contraction in economic activity, forcing the BoC to ease interest rates "earlier and more quickly than anticipated".


Inflation expectations:


The content presented in this newsletter is intended for general informational purposes only. Real estate market conditions are dynamic and subject to change, and the data shared herein is based on the best available information at the time of publication.

While I am committed to ensuring the accuracy and reliability of the statistics and market information presented, it is essential to recognize that my analysis is crafted from independent research and may differ from mainstream analyses that rely on distinct data sources. Real estate markets are influenced by a multitude of factors, both internal and external, which may not be fully captured in the provided data.

Readers are strongly encouraged to conduct their own research. I provide this information in good faith, and for those seeking a more personalized and detailed analysis tailored to their specific needs, I am available for individual consultations. Your trust in my dedication to delivering accurate and valuable information about the real estate market is sincerely appreciated.

MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.