Sunshine Coast real estate market continued to cool over the month of July 2018
The Sunshine Coast real estate market continued to cool over the month of July 2018. Less demand and higher inventory are resulting in some modest price reductions across all types of property.
Let’s break it down:
Detached home sales
Detached home sales were down 10% for gross dollar volume versus last year in July with a total of $43,250,000. Unit sales were down 16% to 54 homes sold. Year to date we continue to see a significant decline from 2017 totals with dollar volume down 21% to $240,100,000. Unit sales are down 24% to 330 detached homes sold so far in 2018. Total detached units available to market are up 18% to 372.
The closing ratio (the amount of unit sales versus available inventory)for July was 14.5% putting us in a balanced market for the second month in a row.
Condo & Town Home sales
Condo & Town Home sales were down 56% for gross dollar volume versus last year in July with a total of $2,860,000. Unit sales were down 42% to 8 attached homes sold in July. Year to date we see a decline in dollar volume of 21.5% to $44,350,000. Unit sales are down 29.5% to 100 attached homes sold so far in 2018. Total attached units available to market are up 15% to 54.
The closing ratio for July was 15% putting the condo and town home market into a balance position for the first time in several years.
Land Only sales
Land Only sales were down 36% for gross dollar volume versus last year in July with a total of $3,500,000. Unit sales were down 33% to 12 land only properties sold in July. Year to date dollar volume is down 19% to $38,550,000. Unit sales are down over the year by 17% to 102. Total land only units available to market aredown12% to 207.
What does all this mean for the real estate market?
Well, that’s a matter of opinion and here’s mine:) As usual any increase or decrease in the market pace is a result of several variables. We have the mortgage stress test as a variable – many buyers no longer qualify for entry level homes both in the Lower Mainland and the Sunshine Coast. We have an increase in available inventory across all property types which will also put some downward pressure on average dollar values. We see less demand by property buyers locally and from off Coast. Whether this is price “push back” or simply due to the lack of interest (it sure has been sunny and nice this summer) remains to be seen.
Some interesting observations
The average dollar value of detached homes & condos and town homes is increasing at the same time inventory is increasing. One would expect a reverse of this but it is not happening.
Detached home values are up 3% year to date yet inventory is also up 18%! Condos and town homes average sales price are up 11% while inventory is also up 14%. Land only properties sales price are down slightly by 3% and inventory is also down 12%!
Home Sellers should consider the overall trend and I believe that is – we are adjusting to the new reality for value yet one must be cognizant that there is more inventory to compete with. Don’t decide on value based on your competition. Decide your asking price using sold comparables as a reference. Being too ambitious in your asking price last year simply resulted in a few extra days on market. Being too ambitious this year can result in you not selling for months, having to adjust your price down (resulting in poor optics) and likely accepting a lower price later.
Home Buyers the market is balancing out for the most part and you won’t feel the same immense pressure to buy the first thing you see. While FOMO (fear of missing out) will continue to be a major variable in the condo and town home market it is no longer a factor for many detached home offerings. That said, the price of homes are unlikely to go down any more than what you can negotiate with an offer today so don’t wait if you need to buy. I’ve seen many buyers wait thinking the market is crashing only to miss out on the market entirely and continue to be in the position of having to rent.
If you have questions about buying or selling call us for real market intelligence.