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How low can it go?
That's the question as the benchmark selling price of a typical single-family home in Victoria has already dipped 9% from its peak in June and will likely slip a total of 20% by the time everything is said and done in the spring.
When Bank of Montreal chief economist Doug Porter was in BC recently he predicted a mild recession and home prices sliding a total of 15-30% in most cities in the province.
Victoria has a healthy economy and is still a desirable place to live, work, play and invest, so prices likely won't plunge the worst-case-scenario 30%, but could very well fall 20%.
Let's put that into numbers.
The benchmark selling price of a typical single-family home in Victoria hit a record-high of $1,464,400 in June.
Then runaway inflation hit, mortgage interest rates spiked and consumer confidence wavered.
Home sales immediately slowed and prices started to soften.
By October, the benchmark selling price of a typical single-family home in Victoria had dropped to $1,341,400, a $123,000 plunge from the record $1,464,400, representing a 9% loss in value.
If the price shedding continues for a few more months to total a 20% loss, the benchmark selling price of a single-family home in Victoria will be down to $1,171,520.
That would take the price below the $1,216,900 it was at in October 2021, which means most of the appreciation built up during the real estate boom of 2021 and early 2022 would essentially be wiped out.
Victoria's benchmark in October for a typical condominium was $602,700, off $40,400 from the record-high of $643,100 in June.
If condo prices drop a full 20% from peak it could end up at $514,480 sometime next year, which is less than the $524,500 it was at in October of 2021.
Falling prices can be viewed two ways.
The first is angst for people that already own houses and are seeing values drop and frustration for people selling their home and dealing with price reductions.
The second is hope for potential homebuyers who might be able to get into the market with lower prices.
However, even if prices ease 20%, home prices in Victoria are still historically high, the third highest in Canada, in fact, behind only Vancouver and Toronto.
It means many people still can't afford to buy a house in Victoria.
Meantime, sales have screeched considerably to 480 in October, way down from the 1,173 sales in March when the market was red-hot.
However, the 480 sales is a 17% increase from the 410 sales in September and marks the first time since May there's been an increase in month-over-month sales.
The Victoria Real Estate Board is putting a positive spin on this mixed bag of statistics.
"October sales have shown what the industry has been experiencing -- an increase in activity, more sales and well-priced homes receiving plenty of attention with some receiving multiple offers," said board president Karen Dinnie-Smyth.
"If you are considering selling a property, the continually evolving market conditions this month reinforce the need for up-to-date analysis of how to price your home during this type of market. With many micro-markets within the Greater Victoria area, conversations with your local realtor on how the housing market is performing in your specific area will be crucial to your success."