The Comox Valley real estate market is now passed the lows of 2014 and it is gathering strength. Last year we recorded a record number of sales. Year to date sales are brisk and prices are either firming or increasing (depending on the hyper-local area). Over the past 12 months our team was involved in 5 competing offer situations compared to none the previous 4 years. More striking is that the average sale price of a single family home has risen from about $360K to $425K in the past 5 months and higher end home sales are rising along with prices. If you have been looking at luxurious full featured homes in Courtenay and waiting to buy now may be the time.
So where are we headed? Our market is affected by a number of things to various degrees so let’s first consider the Canadian economy and Canada as a high tech industrial society in the trillion dollar class. Canada’s banks emerged from the 2008 financial crisis among the strongest in the world based on a number of things that included appropriate regulations in the country at the time.
Canada has the 10th largest economy in the world based on Gross Domestic Product. Moreover, our country is ranked #3 behind only Saudi Arabia and Venezuela for proven oil reserves. Pretty good performance and possibilities for a country of about 35 million people.
However, we are ranked 16th for Purchasing Power Parity and the rapid decline of our dollar compared to the US dollar over the past 6 months is troubling. This factor alone has driven many consumer goods higher for us. Why is that? About 85% of what we export goes to the US and about 25% of what the US exports comes to Canada. So we are highly dependent on the US and sensitive to that market. Equally troubling for us is the rapid decline of oil prices.
While Alberta has been hit particularly hard, the BC economy has been holding its own. Looking ahead forecasters are predicting that Canada’s economy will grow from between 0.7 and 1.1% in 2016. The Bank of Canada is a bit more optimistic at 1.5%. These figures place us at the bottom of the G7 nations. Add to this large deficit spending by the new federal government and we are not in great shape as a country moving forward in the near term.
British Columbia Economy
Most institutions and agencies are predicting that BC’s economy will outpace other provinces with gains for 2016 around 2.5% to 3%. However, slowdowns in China and other emerging markets will likely result in an expanding alignment with the US markets and we will continue to feel the adverse economic impact of the falling Canadian dollar on our pocket books.
Demographic trends can and do have an impact on us and our local economy. Last year we experienced rising inflows of people into BC. Some due to the Alberta oil situation and others due to generational trends such as baby boomer retirements and the desire by many to seek quality of life and a more temperate climate such as that offered by coastal BC.
The median age in Canada is 39.5 and the median age in BC is 41.9 years while the median age in the Comox Valley is 48.3 years. In contrast the median age in Qualicum Beach is 63.9 years. Nearly 70% of families in the Comox Valley are married, 15% are common law and 15% are single parents. Almost 91% report English as their mother tongue. About 2.5% speak French and about 6.5% speak a non-official language (German, Dutch and Spanish being the most prevalent.
Interest rates remain at 50 year lows with the overnight prime maintained at 0.5% by the Bank of Canada
Home Ownership Profile
About 66% of private household families live in single detached homes in the Comox Valley. About 15% live in semi-detached or row houses, 15% in apartments and 4% in mobile homes. The variety of luxury homes available for purchase in Comox is not plentiful but the ones that you can find on the market are generally very nice.
Local Market Factors
A number of factors above our local market level have the potential to affect us. At the federal level, low interest rates remain a positive factor. A low dollar is a negative factor. Alberta’s troubles may mean more people coming to BC assuming they can find jobs here but it also may mean people who planned to move here near retirement from areas like Calgary who cannot sell their homes may be prevented from doing so.
Overall, our market is well past the last peak of 2007 and it is sufficiently past the lows of 2014 for it to be considered a different market this year. Overall listings are down about 11% over a year ago and sales were up about 7% compared to last year.
Comox Valley Real Estate Market Outlook
There are opportunities for both sellers and buyers in the current market but buyers should not expect to be successful with low offers on Courtenay luxury homes listings that may have been accepted a few years ago. The heart of our market is no longer a buyer’s market. Some parts are now favouring sellers and other parts have become more neutral. Barring some unforeseen major issue, market prices are poised to increase about 1% to 2% this year and sales are expected to continue to be brisk.
While these overall statistics are informative, experience shows that good inventory is down more than the figures show and that sales are brisk for homes that are well priced (based on current market value and not based on other measures such as property tax assessed value), in a good location, and well taken care of. Each hyper-local segment of our market will experience variances to the general market conditions just discussed. For more specific information on opportunities for buyers and sellers of high end real estate in the Comox Valley please contact Brett directly.