Statistics Canada Figures Suggest Cautious Optimism and Pricing Concerns for Victoria, BC, Real Estate

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Statistics Canada just released figures that suggest the real estate market may be rebounding from the decline of previous months, but that also indicate pricing remains a key concern for home sellers.

Statistics Canada released figures on October 13 that indicate cautious optimism may be in order for home sellers, with sales up 2.9% from last year and sales of existing homes up in August over the previous four months. But "cautious" is the key word because prices increased only 0.1% from July to August and, according to Craig Alexander, Chief Economist with TD Bank Financial Group (Times Colonist, 13 October 2010), much of the price change reflects "what is happening to construction costs, not what is happening to supply and demand in the real estate market."

Still, Alexander maintains, Statistics Canada's latest figures are "consistent with the view that the Canadian economy has picked up. Overall, the housing market is showing signs of stabilizing." While sales evinced a decline of 20% in August from August 2009, the trajectory of the current trend for new-home prices does look slightly promising, especially in the Victoria, BC, real estate market, which has escaped some of wider swings in the market.

Victor Flume, President of the Canadian Home Builders' Association, cautions that because the market is likely just "treading water," careful pricing is critical right now.

He says, "There is still a lot of discounting going on," but, he adds, "last year maybe we were giving away $50,000 in extras, and this year it's $30,000." Although buyers "who would have bought in the fall are gone" and despite the fact that there doesn't seem to be "pent up demand out there," the overall consensus is that the outlook for the industry is gradually getting better.

Flume does note, though, that members of the Canadian Home Builders' Association, as well as sellers of existing homes, are finding pricing "tough." Victoria, BC, realtor Mark Imhoff understands well the importance of careful pricing in this improving but still fragile market: "When you think about it, there are several other homes for sale competing with your home. I will help you price your home competitively to attract qualified buyers." Imhoff's goal is to "sell your home for the highest possible price in the shortest possible period of time."

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