Most people who have come to visit Comox and the surrounding Comox Valley over the past two years have observed a dramatic rise in home prices and a significant amount of residential new construction. Some builders in the area have become so busy that they say they cannot keep up. As with most things in life, trends often change and cycles change and repeat. The residential housing industry is no exception.
Prices started to climb in the spring of 2016 and as of last month single family homes in Comox are still climbing. Last month the average price of a home went through the $600,000 barrier. Having mentioned this there are signs of a change on the horizon. The total number of houses that changed hands last month dropped off in a number of important areas and categories and the number of price reductions recently has increased. While these are small sample sizes they are indicators within the context of what may come. We have been on an upward trend for more than two years and there are economic pressures that are counteracting demand in the industry. For example, The BC Real Estate Association forecasts a 20% drop in sales in 2018 compared to 2017. They forecast a decline in economic growth overall and a reduction in consumer spending and construction activity as we head into 2019. The aftershock of mortgage rule changes and tightening by the government is an additional negative pressure on future housing price and sales growth.
This City of Courtenay has displayed similar tendencies on home prices. The median price of a home on the east side of Courtenay was about $525,000 last month. Cumberland with all of its new construction was not that far behind at $475,000. Surprisingly, the average prices of homes in Crown Isle last month was over one million dollars. The latter figure, however, was based on only two home sales in that area with one being over a million. A total of three homes sold for over a million in Crown Isle this year to date. Try to find any single family home in Crown Isle priced below $600 thousand. Most are priced in the mid $600 thousand dollar range and up.
While many forecasts are based on historical patterns and changes in those patterns along with an analysis by some who focus on economic activity and related factors, they are just forecasts. Just like the weather, changes in the housing industry can happen quickly, with little warning, and it can have a dramatic impact on all of us. Will that happen here? Nobody knows for sure but it is highly likely that there will be a moderating change on prices. How much of a moderation will be related to how many people put their homes on the market in the early spring of 2019. Now that we are past Labour Day the market has entered a typical cyclical cooling period as schools are now active once again. Approaching the Christmas Holiday period, the market will go a bit deeper into a slumber and then wake up in the late February – early March timeframe to repeat what has become a fairly typical cycle of home sales activity in the Comox Valley.
Now may be the time to enter the market as a home buyer since there are generally fewer buyers looking to buy a home at this time of year. As a seller it may also be an opportune time to enter the market as the number of new listings is down and there are fewer competitors for great well maintained and good showing move in ready homes.