Comox Valley Market Report

New home prices in Canada edged down by 0.1% month-on-month in January 2024, following a flat reading in December and missing the market estimates of a 0.1% rise. Prices were down or unchanged in 21 of the 27 census metropolitan areas surveyed, led by Ottawa (-0.4%), Vancouver (-0.3%), Montréal (-0.3%) and Calgary (-0.2%). Notably, it was the 13th consecutive period of decrease in Ottawa, mainly due to offered promotions, as builders attempted to generate sales. Conversely, the largest increases were seen in Edmonton (+0.8%) and Trois-Rivières (+0.4%) amid higher construction cost and improved market conditions. On a yearly basis, new home prices dropped for the 10th month in a row by 0.7% in January, affected by elevated interest rates. The steepest declines were recorded in Ottawa (-5%) and Victoria (-3.2%). source: Statistics Canada

"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".

Source: Investing.com

Inflation expectations:

Disclaimer:

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.

"Decoding Market Trends: Unveiling the Nuances Behind December's Real Estate Fluctuations in Comox Valley"

In this January Market Update:

• Real Estate Quote of the month

• Comox Valley December 5 yr. home prices

• Interest rates

• Inflation expectations

• Data used for Comox Valley December 2023 pricing

Quote of The Month:

"Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world." – Franklin D. Roosevelt

Comox Valley December 5 yr. home prices

In the final month of 2023, the real estate landscape in Comox Valley witnessed a substantial 18.3% dip in the average price of single-family dwellings (SFD), coupled with a significant 57.1% reduction in sales volume when compared to the previous month of November 2023.

It is crucial to recognize the natural ebb and flow within these figures, especially during the holiday season. Historically, December experiences a slowdown due to reduced activity, reflecting familiar patterns seen month after month and year after year. However, what sets this year apart is the sustained decline observed over the last three years, surpassing the typical fluctuations confined to a single month or year. Notably, the magnitude of this shift since the peak in April 2022 is a noteworthy factor influencing the current market scenario.

The downward trajectory of December home prices in Comox Valley has surpassed the levels seen in the past three Decembers by a considerable margin. While some may attribute this to seasonal variations, it's essential to question why the prices and sales volumes in the last three Decembers were considerably higher. The answer lies in the influence of interest rates. During those periods, interest rates were notably lower, impacting affordability significantly. The recent increase of interest rates by 4% or more has inevitably affected buyer behavior and market dynamics.

Looking ahead to the spring season, an anticipation of price recovery looms on the horizon. The pivotal question remains: by what extent will prices rebound? While avoiding speculation, it is challenging to envision prices surpassing last year's spring highs unless external factors, such as a potential buyer's strike or mortgage renewals forcing sales, flood the market.

It's essential to note that the data used for calculating the average price in December excludes acreages or waterfront properties and is for Zone 2. For a comprehensive breakdown of this data, please refer to the detailed information provided at the end of this newsletter. Stay informed and navigate these shifts wisely in the ever-evolving real estate market of Comox Valley.

Quarterly topic: Interest rates unchanged for November

Inflation expectations:

Data used for Comox Valley 5 year average price:

Included: Zone 2, Excluded: ocean front, acreages

Disclaimer:

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.

The Impact of higher Rates on Real Estate. "Comox Valley Real Estate Undergoes A Transition In Pricing: Down 25% Since April 2022 Levels"

In this December Market Update:

• Real Estate Quote of the month

• Comox Valley November 5 yr. home prices

• Interest rates

• Inflation expectations

• Data used for Comox Valley October 2023 pricing

Quote of The Month:

"Don't wait to buy real estate, buy real estate and wait." – Will Rogers

Comox Valley November 5 yr. home prices

As anticipated, pricing has continued to soften, marking a decline into the fall season. While at first glance, it may seem that prices have remained relatively stable since last November 2022, it is crucial to recognize that last November marked a significant correction from the peak observed in April 2022, as clearly illustrated in the chart above. Following this correction, there was a subsequent recovery in prices up until July—an observable bounce—followed by a continued decline, bringing us to our current standing.

It's important to acknowledge the inherent fluctuations in these figures, particularly during the autumn season, which is often influenced by reduced activity and recurring patterns evident month after month and year after year. What distinguishes this year is the persistence of the decline over two years, surpassing the typical confines of a single-month or single-year fluctuation. Additionally, the magnitude of this shift since the peak in November 2021 is noteworthy.

In November 2023, the average price of a single-family dwelling (SFD) experienced a 1.8% decline, coupled with a 30% reduction in sales volume compared to October 2023.

Please be aware that the data used for calculating the average price for November excludes acreages or waterfront properties. For a detailed breakdown of this data, please refer to the end of this newsletter.

Quarterly topic: Interest rates unchanged for November

Inflation expectations:

Data used for Comox Valley 5 year average price:

Included: Zone 2, Excluded: ocean front, acreages

Disclaimer:

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.

"Comox Valley Real Estate Heads South, Taking A Two-Year Price Plunge Beyond October 2021 Levels"

In this November Market Update:

• Real Estate Quote of the month

• Comox Valley September 5 yr. home prices

• Interest rates

• Inflation expectations

• Data used for Comox Valley October 2023 pricing

Quote of The Month:

"Location, location, location... unless it's haunted, then it's a deal-breaker." - Unknown

Comox Valley October 5 yr. home prices

In the past three years, we've witnessed noteworthy price hikes, some surging by as much as 25% within a single year. However, this month, the Comox Valley is following a somewhat different path.

It's crucial to recognize that these figures tend to fluctuate, especially in the autumn season, affected by reduced activity and the recurring patterns that unfold month after month and year after year. What sets this year apart is that the decline spans two years, extending beyond the confines of a single month or year. Furthermore, the swiftness of this shift since the previous peak in September is remarkably striking.

In October 2023, the average price of a single-family dwelling (SFD) dropped by 5%, with a sales volume decline of 74.36% compared to October 2022. Back in October 2021, there was a more significant decrease in the average sale price, down by 11%, coupled with an 83% reduction in sales volume.

Please note that the data used for the average price for October does not include acreages or waterfront properties and can be found at the end of this newsletter.

Please be aware that the data used for calculating the average price excludes acreages or waterfront properties. For a detailed breakdown of this data, please refer to the end of this newsletter.

Quarterly topic: Interest rates unchanged for October

The Bank of Canada's recent announcement on October 25th revealed a decision to maintain the current interest rates, citing a revised economic growth forecast and heightened concerns regarding inflation. This move retains the policy rate at 5%, a level unseen in the past two decades. Furthermore, the central bank emphasized its preparedness to entertain additional interest rate hikes if the persisting inflationary pressures persist.

One significant factor that could potentially trigger further interest rate increments is the ongoing depreciation of the Canadian dollar vis-à-vis the US dollar, a development that is currently unfolding as the US upholds its 10-year interest rate at 5.5%. This particular circumstance might compel the Bank of Canada to contemplate rate hikes as a preemptive strategy to counter the escalating threat posed by rising import prices. Such a scenario could potentially exacerbate the existing inflationary concerns within the Canadian economy.

The robust position of the US dollar, bolstered by its elevated interest rates, highlights the critical need for the Bank of Canada to carefully consider strategic adjustments aimed at preserving overall economic stability.

Inflation expectations:

Data used for Comox Valley 5 year average price:

Included: Zone 2, Excluded: ocean front, acreages

Disclaimer:

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.

"Comox Valley Real Estate Resurgence: Unexpected September Revival and Market Trends" This month saw an uptick in property values".

In this October Update:

• Real Estate Quote of the month

• Comox Valley September 5 yr. home prices

• Interest rates

• Inflation expectations

• Data used for Comox Valley September 2023 pricing

Quote of The Month:

"The best investment on Earth is Earth." – Louis Glickman

Comox Valley Single Family Dwellings(SFD).

September 2023 witnessed an unexpected resurgence in the real estate market, defying the conventional autumn slowdown. The sudden influx of buyers took many by surprise, prompting us to wonder where they were during the typically bustling month of June. While it's true that, on average, last September featured lower prices compared to this September (+7%), the market still lags significantly, with a decline of over $100,000 since May 2022, marking an 11% decrease overall.

However, when viewed from a different perspective, the market's resilience since hitting its lows in June 2023 is remarkable. It has rebounded, showing an increase of $128,000 or 14%, approximately. This positive turnaround can be aptly described as a substantial bounce back.

In summary, when considering the average sale price for Single Family Dwellings in the Valley, it's evident that a peak was reached in May 2022, and the prevailing trend points downwards. But then again, who expected September to ellipse June?

Quarterly topic: Interest rates unchanged for September

Inflation expectations:

Data used for Comox Valley 5 year average price:

Included: Zone 2, Excluded: ocean front, acreages

Disclaimer:

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.