by Shannon Moneo
There’s no doubt the pandemic has affected the local real estate market. Here’s what the experts think will happen next.
Around the world, the past year has been startling — and the same could be said for home sales in Greater Victoria. A slow start was followed by a flurry of home purchasing in the second half of 2020. “The biggest theme for Greater Victoria in 2020 was the high demand, across all segments, particularly in single detached homes,” says Pershing Sun, a senior analyst with the Canada Mortgage and Housing Corporation.
“In the third quarter, sales were unseasonably high. In the fourth quarter, sales slowed, but were still higher than last year.” Sun attributes the orgy of home-buying to pent-up demand due to the spring lockdown.
Agent David Langlois, with Macdonald Realty in Victoria, points to the almost 8,500 homes sold in 2020, outpacing2019’s 7,255 — about 15 per cent more — and putting 2020 in the top 10 for all-time sales.
“COVID-19 has fueled more desire for a single-family home or duplex, something with a front door and a backyard,” says Langlois, who is also president of the Victoria Real Estate Board for 2021.
That has translated into a faltering condo market. As Langlois notes: “People don’t want to be living in a 500-square-foot box surrounded by other 500-square-foot boxes.” The past year also exposed another shortage, with an all-time, 25-year low of inventory.“
Twenty years ago, we were behind by 1,000 houses,” Langlois says. “Nothing was done to speed things up. Now we’re behind by 20,000.”
He says COVID-19 made a bad situation worse. Initially, municipalities didn’t issue building approvals, but that improved as 2020 progressed. As well, construction crews weren’t at their full complement.
About 8,500 homes were sold in 2020, outpacing the previous year’s 7,255 – putting 2020 in the top 10 for all- time sales.
“As inventory drops, people who can sell don’t put their home on the market until they can find the home they want,” Langlois says.
B.C.’s foreign buyers tax has freed some homes — predominantly high-end, waterfront properties. Homeowners from Alberta, Ontario, California, New York and even Vietnam have sold residences ranging from $3 million to $10 million, says Chace Whitson of Macdonald Realty in Sidney.
Ironically, a significant number of people from those places are purchasing the homes. Whitson has also been selling to buyers from the city of Victoria who are decamping to the Saanich Peninsula. Langlois has seen similar buyers — including Canadians who have been long-time residents of places like California— deciding to “come home.”
Langlois also figures the work-from-home segment substantially grew in 2020, citing Greater Victoria’s many amenities and natural attractions.
“If I’m going to work from home, where do I want to live?” he asks. But Sun throws some shade on that theory.“ People say the virus made people want to leave the city,” she says. “Not so. It’s more a question of affordability.
The urban exodus is not entirely the case in Victoria.” Instead, low and stable mortgage rates are driving home purchasing in Greater Victoria, a market that has not seen substantial unemployment. Areas seeing strong sales of single, detached homes are Saanich, Langford and Colwood, Sun says.
Langlois notes that it’s a nine-month wait to buy a home in West Hills or Royal Bay. And about 50 per cent of homes get multiple offers, roughly 40 per cent of homes sell over the list price and bidding wars continue on anything that’s priced right, in a desirable area.
“I’d never seen bidding wars in Sooke or the Highlands,” Langlois says. “It’s regular now.” As for 2021, Sun is cautious. The frail economy and 2020’s negative population growth in B.C. could pose a potential risk, with condo sales bearing the brunt.“
The current heat is mostly supported by low mortgage rates and those taking advantage of cheap money,” she says.“ It’s easy to get wrapped into a buying mentality.”
Whitson envisions an active 2021 with prices marching upward, while Langlois cites the lack of inventory as an ongoing struggle.
“There’s no end in sight to the continuing demand,” he says. “And we’ll not see a normal until the vaccine is widespread. COVID-19 has fueled more desire for a single-family home or duplex, something with a front door and a backyard.”
COVID TREND: Buying a Home Online
They may be dropping $5 million for a home, but buyers in the Greater Victoria market are willing to purchase a property without having set foot in it.
“I have seen more people buying sight unseen since the pandemic,” says David Langlois, a realtor with Macdonald Realty. Lately, he’s had his share of nerve-wracking moments when the once-absent buyer finally sets a real foot in the home. But thanks to technology, customers have rarely regretted their decision to buy without a test drive.
Even though Langlois admits a virtual tour can’t replace actually walking through a home, COVID-19 has changed the way realtors do business.
“There’s very little window-shopping now. Buyers look online first, narrow it down and look at two instead of ten,” he says. “We do see more concentrated viewings.”
Chace Whitson, also with Macdonald Realty, has been optimizing technology for several years, but the pandemic has zoomed it to a higher level.
“It’s been such a game changer,” he says. “It’s made things very easy for buyers.” His virtual toolkit includes FaceTime, YouTube, Skype, Zoom and drone footage inserted into 3D offerings like Matterport tours. Whitson also has lifestyle-type house listings, akin to short movies, that feature a house melded with the work/play ethic. Even Victorians are opting to forgo actual home visits in favour of the silverscreen, Whitson says.
One caveat. With the disappearance of open houses or jam-packed viewing itineraries, getting a home inspection is highly recommended.