June 8, 2009
Bond Yields Jump Again
The 5-year government bond rocketed to 2.71% today. Various lenders have already issued fresh new fixed rate increases. More may follow tomorrow if yields don’t retrace.
Two-year bond yields also broke to the upside. That may lead to upcoming rate increases on shorter-term mortgages, which have been insulated from rate hikes for several months.
If you’re shopping for a fixed mortgage, be safe and get your application in soon.
The Victoria real estate market is starting to look a little more like itself, according to the Victoria Real Estate Board.
A number of homes are receiving multiple offers, the inventory around the region is starting to sell and activity is picking up.
"It's quite a turnaround," said Chris Markham, president of the board, noting that despite talk of recession, Victoria appears to have weathered the storm. "It seems as fast as we went down, we've come right back out again."
The numbers appear to back that up, as last month looked an awful lot like May 2008.
A total of 879 homes and other properties sold in May through VREB's multiple listing service, a 17 per cent increase over April and up 14 per cent compared with the 770 sales in May 2008.
The average price for single-family homes sold last month was $573,442, up from $550,736 in April. That is down slightly from May 2008, when the average price was $601,897. The median price of homes sold last month was $525,000.
The average price for condominiums was $306,971 last month, up from $292,252 in April, but down from last May when it hit $336,157. The median price for condominiums in May was $279,500.
The average price of all townhomes sold last month was $400,788, virtually unchanged from $400,695 in April, but again down from last May's average price of $435,058. The median price dropped to $375,000.
There were 3,789 properties available for sale at the end of May, down 13 per cent from the 4,332 properties available in the same month a year ago.
"I think this shows you Victoria is insulated and always has been," Markham said. "We have watched higher highs and lower lows in other places."
Markham says Victoria is rebounding to normal as the market activity picks up heading into the summer months.
"I think our market was artificially soft, and right now people who were waiting for lower prices and lower interest rates -- buyers who delayed -- are back," he said, noting he showed houses during the weekend to a couple who faced a number of homes with multiple offers already on them. "We're seeing a lot of people out and a lot of activity."
Jessica and Justin Bell have been part of that activity.
Spurred on by low interest rates and a sense the market was about to rebound, the couple were waiting yesterday to hear if their offer on a Langford home had been accepted.
"We've been renting for a long time and it's hard to pay our rent cheques every month when we know we're paying someone else's mortgage," said Jessica Bell. "And we've been watching the housing market and have seen a number of houses coming down in price, and since our interest rate was fabulous we just felt it was time."
The problem is that there are others who feel the same.
Jessica said there were multiple offers on the house they want, and they have been on tenterhooks for days.
"It's been very exciting but also very stressful," she said.
"You really have to go with the flow, as a lot of places we went to look at had been snapped up -- especially the ones with suites. You really have to be on top of it."
While there's heavy competition for single-family homes priced between $400,000 and $600,000, that's not the case at the higher end of the market, Markham said.
"If I was marketing your $2-million property, I couldn't say that," he said. "Bigger money is slower to move. I know there are some investors who were out there thinking things might come down hard and they were looking for some blood, but that hasn't happened.
"There are some good deals, but there's no bloodbath."
North of the Malahat, prices remained flat despite a slight increase in sales.
"We are seeing the number of sales transactions consistent with last year's levels, with three out of the six [Vancouver Island Real Estate Board] areas actually having significant increases compared to last year," VIREB president Ray Francis said.
aduffy@tc.canwest.com
GREATER VICTORIA
- Average sale price, single-family house: May $573,442, April $550,736, May 2008 $601,897
- Median sale price, single-family house: May $525,000, April $515,000, May 2008 $545,000
- Average sale price, condominiums: May $306,971, April $292,252, May 2008 $336,157
- Median sale price, condominiums: May $279,500, April $273,950, May 2008 $295,500
- Average sale price, townhouses: May $401,854, April $403,367, May 2008 $434,770
- Median sale price, townhouses: May $375,000, April $395,000, May 2008 $394,900
Source: Victoria Real Estate Board
NORTH OF MALAHAT
Average price for May 2009, compared with May 2008
- Campbell River: $280,261, -17%
- Comox Valley: $327,844, -14%
- Nanaimo: $341,462, -6%
- Parksville/Qualicum: $346,113, -14%
- Port Alberni $227,830, -3%
- Cowichan Valley: $343,856, -9%
Source: Vancouver Island Real Estate Board
