The stats for sales of housing in Victoria for August shows a drop from the number of sales in July, I am not surprised at this drop. My take on the market is that the fall/winter of 2008/09 had a lot of people stay away from the market and then come on stream as a bunch in April/May. A lot of people waited and then rushed into the market.
It is only in August that year to date sales in 2009 have passed the sales in 2008. As it seems to be trending, the total sales in 2009 look to reach 7000, other than last year, the lowest level of sales in a decade.
As it stands, we still have a large supply of houses on the market. At 3500 active MLS listings in Greater Victoria, we still are at much higher levels of stock than we have seen in years other than since the spring of 2008. This is a high level of stock on the market even with all the 'speculative sales' off of the market - people are no longer listing to see if they can get a crazy offer for their house.
The average value of single family home was definitely impacted by the sales in Oak Bay of some expensive house, the Oak Bay average in August was $822 915 on 20 sales and a median of $677 550. You factor out Oak Bay and the average price in the region for single family homes falls $13000, around 2%, to $583K. June and July also saw high end sales in Oak Bay.
September is normally a month that we see a drop off in sales but the numbers for this September will be boosted a bit because of a late Labour day. The need to have sales completed and allow for moves by Labour day are crucial to a lot of single family home sales. The first week of September had about the same number of sales as weeks in August, about 183. Last week this was 140.
We had the latest possible Labour day this year meaning that the summer real estate sales cycle had an extra week. Based on 140 sales last week and 181 the week before, this should mean that September will have about 600 sales in the month.
At 140 sales per week, we currently have a housing stock of close to six months. In May/June the housing stock was about four months.
As sales decline in the winter, stock to sales ratio will continue to rise even as property listings expire. By the end of November the number of sales has historically been around 100 a week for about ten weeks.
While I have no proof, I believe we are going to see a winter 2009/10 that will be similar in sales to last year. I believe the market will sour dramatically as the weather turns.