What word is best to use for September? Horrific comes to mind.
Total sales - 395 units - this is the worst September for sales in more than 20 years, possibly more than 30 years, I do not have detailed data going back that far into the past.
September is normally a average month in the year for sales, it is normally higher than sales than the fall and winter months. It is in March that numbers rise.
The stock on the market is high, very, very high. We finished 4300 units on the market at the end of September. September saw the addition of 1200 units on the market, an above average amount for the month. Three times as many units came onto the market as sold.
The fall and winter of 2008/09 were dire in local real estate, this fall and winter look to be worse. The market will be bad enough that an average realtor is unlikely to be part of more than one sale between now and March 1st.
There has been a mix in what prices are doing when it comes to single family homes. The 'better' quality neighbourhoods are seeing their prices hold better than the cheaper neighbourhoods. It is in Saanich West and Esquimalt that the prices have fallen the furthest so far. These locations are seeing falling price because of the low number of new entrants into the market. This will percolate up through the market as people can not sell in Esquimalt and move to Gordon Head.
We see lot more houses on the market for under $400,000. In the core there are 12, the Westshore has a similar number. There are 65 between $400,000 and $500,000 in the core and 90 on the Westshore. This means we have 179 single family homes for sale for less than $500,000 in the core and Westshore. This is more than the total of sales of single family homes in September in these areas.
The bottom end of the market is $339,000 at the moment for a 764 square foot house on Lyall Street in Esquimalt. The lot is only 2030 square feet, but this is more than what you get with a condo and no condo fees.
We are going to see a bigger fall in the lower end of the market over the winter with the nadir reached when the cost of a small two to three bedroom house is affordable for a young couple with a combined income of $80,000 or so a year. This means having a reasonable selection of houses in the range of $300,000 to $330,000.
As the prices fall in Esquimalt and Tillicum Gorge, the number of people that will be able to move up into other neighbourhoods will fall and will pull those prices down. The problem is that few people that have purchased since 2006 will have enough equity in their homes that they can buy something else in the region. It was the dramatic rise in equity that allowed people to sell in Esquimalt and move to Gordon Head.