If raising interest rates was meant to cool a superheated real estate market, then it’s working. These days realtors have plenty of time to work on their golf swings and ponder the year that was.
At the same time, wannabe homeowners have much more to choose from and much less pressure to buy.
At least for now, the days of subject-free multiple offers and bidding wars pushing the price of a listing $100,000 – or more – over the asking price are gone. Good riddance.
What a difference a year can make. In February 2022, you could get a 5-year fixed mortgage for between 3 percent and 3.25 percent. Today, the fixed 5-year insured mortgage rate sits at around 4.5 percent.
Current real estate sales and listing statistics published by the Vancouver Island Real Estate Board tell the story.
Let’s look at the Comox Valley, where listings are way up, and sales have dropped much more than prices. Still, prices are down.
In February 2023, the average price of a single-family detached house was $816,700, down 14 percent from a year ago. Prices for attached townhomes are down 19 percent.
That means there are way more houses on the market. Last month there were 152 residential listings, nearly three times the number of listings at the same time last year.
Properties are also gathering dust and sitting on the market a lot longer. The odds of selling a house dropped 72 percent between February of this year and February last year. It’s taking realtors on average 78 days to sell a property, 2.5 times longer than last year.
So what does this mean?
The market has cooled, for sure. And when real estate markets cool, part-time realtors start to drift back to whatever they were doing for money before they decided to get their license and cash in on the bubble.
More houses are on the market these days, and prices have softened. But at nearly $820,000 for a stand-alone single-family home, prices are still well above what many can finance.