Last month’s real estate sales set a another record for the average selling price for a single-family home in Greater Victoria as rising sales of luxury homes, demand for single-family houses, low interest rates and tight supply combined to fuel the market.
July’s average price for a single-family house moved to $1.033 million from the previous record of $1.014 million in June, said the Victoria Real Estate Board.
Multiple bids are coming in for desirable properties despite worldwide uncertainty about the implications of the pandemic.
Justin Cownden, real estate agent with Pemberton Holmes Real Estate, said a client decided not to make an offer on a Shawnigan Lake house last month because 10 offers had already been submitted. The successful bid came in above asking price with no conditions.
Cownden is seeing a “lot of activity,” in all levels of the market as it rebounds after cooling during the first months of the pandemic.
Similar to last month, sales of $2-million-plus properties in the capital region climbed. High-end sales skew the average price.
In July a total of 30 single-family-homes sold for more than $2 million and of those, four went for more than $4 million. In July of last year, there were nine single-family sales of more than $2 million, the board said Wednesday.
As well, five condominiums sold for more than $1 million.
In June, 23 single-family houses sold for more than $2 million.
Developer Stan Sipos earlier sold 80 per cent of the 57 units in his Customs House luxury condominium project overlooking Victoria Harbour and expects to release the remaining units for sale in the fall. Those will probably be priced at $1.8 million to $6 million. The penthouse sold for $11 million.
“We are getting lots of calls. Lots of interest from all over the place,” including the U.S., Sipos said.
Victoria is appealing because it is quiet, offers a good lifestyle and has fared well during the global crisis, he said.
Sipos has heard of multiple offers for Oak Bay properties and of two sales which took place over video applications without the buyer being present.
Real estate board president Sandi-Jo Ayers said sales numbers in the capital region were unusually high for June and July.
“But we are not in a typical season. We cannot derive an ongoing trend nor forecast by looking at activity because we know the market is subjected to unusual factors amidst a health crisis.”
It is likely that spring demand moved into the summer, she said.
“Time will tell if these factors are resulting in a very compressed cycle of activity or if this trend will persist in the fall.”
The benchmark value for a single-family house in the core area was $910,400 last month, up from $861,100 in the same month a year ago.
A benchmark represents changes in value for a typical home in a specific area, a measure which real estate boards say is more representative than an average price. The core area is made up of Victoria, Saanich, Esquimalt, Oak Bay, and View Royal.
A long-term, low supply of properties for sale is continuing in this area, Ayers said.
“Though we had a good number of new listings come to market this month, many of those listings were snapped up by buyers.
By the end of July, there were 2,653 active listings — 10 per cent fewer properties than in July 2019.
“Right now we have a lot of demand for single-family homes without the numbers to meet demand — prospective buyers are often entering into multiple offer, competitive situations or are unable to find appropriate properties,” Ayers said.
For the area north of the Malahat, Vancouver Island Real Estate Board president Kevin Reid also noted interest in single-family homes.
“An interesting development we’re noting is that there seems to be more demand for single-family homes and less interest in condominiums and townhouses at the moment.
“It makes us wonder whether quarantine and lockdown have instilled a desire for more space among buyers.”
A total of 892 units sold last month, a four per cent decline from July of last year.
The benchmark price of a single-family home board-wide was $545,700 in July, an increase of six per cent from the previous year.
Real Estate Roundup 9.25.20 – Real Estate Daily Beat
Real Estate Roundup
- SL Green and Jacob Chetrit have resolved their dispute over the broken contract for the Daily News Building. (TRD)
- Global pricing and demand for office space will take almost five years to recover from the damage wrought by the pandemic, according to a report by Cushman. Vacancies worldwide are expected to peak at 15.6% in 2022, with about 95.8 million SF of space emptying over the next two years. That’s more than during the 2008 financial crisis, when tenants abandoned 85 million square feet of offices. (Bloomberg)
- Barclays is set to ramp up staff numbers in New York next month, asking a fresh contingent of employees to be “primarily office-based”, as the UK lender prepares to U-turn on its plans to bring more people to its Canary Wharf headquarters. (FinancialNews)
- Mizuho Financial Group plans to trim office space in New York and London in anticipation that some staff will keep working from home even when the coronavirus pandemic is over. (Bloomberg)
- When Everybody’s Working At Home And The Magic Is Gone. (NPR)
- Brookfield Properties and Namdar Realty are separately requesting they be allowed to give up their J.C. Penney-anchored malls to special servicers to avoid loan foreclosure. The action is known as a “deed-in-lieu.” Mall owners most likely to default are those with CMBS debt. Such loans are difficult to restructure because of covenants bondholders have with servicers. (TRD)
- Spring Education Group has signed a 20-year lease for 34,500 SF at Albanese Development’s 556 West 22nd Street. The group’s BASIS Independent Schools will occupy the entire three-story building to serve students in grades 6 through 12. (TRD)
- Although Zillow has long denied it wants to become a real estate brokerage, the changes to its iBuying program mean it is doing just that. Previously, Zillow worked with local real estate agents to complete both ends of the transaction, but now it will instead use its own employees who are licensed real estate agents. (MotleyFool)
- Co-living firm Common has raised $50 million in new venture capital this month. Earlier this summer, competitor Juno Residential launched with $11 million in venture funding. (WSJ)
- New York Community Bank and Signature were among the top five most-active lenders in New York in the first half of the year, and almost all of their portfolios are tied to the area. With retail and apartment vacancies rising and rents falling, and with the prospect of employers cutting their office space looming, the question is whether the hundreds of millions of dollars the banks have set aside for commercial-property loan losses will be enough. (Bloomberg)
- Blackstone’s China Real Estate Head Tim Wang leaves after 10 years. (Bloomberg)
- Blackstone Group closed on the largest real-estate debt fund ever. The private equity firm began raising money for the fund in the spring of 2019, and ultimately took in $8 billion. Fundraising got a boost after Covid-19, partly because interest rates fell, increasing the appeal of relatively high-yielding real estate debt. (WSJ)
National Real Estate Deal Roundup 9.25.20 – Real Estate Daily Beat
National Acquisitions Roundup
- Amazon has acquired 550 Army Navy Drive in Pentagon City, Virginia from the Blackstone Group for $148.5 million. The tech giant plans to demolish the existing Marriott hotel and utilize the 1.5 acres of land as part of its second headquarters. With the deal, Amazon now owns the entire 11.6-acre PenPlace. The site was always part of the company’s HQ2 plans, but the hotel remained the last holdout, and it appeared the company would just build around it. (CO)
- A consortium of South Korea’s Hana Alternative Asset Management has signed a contract to acquire a 38-story office tower in downtown Seattle for around $686 million. Skanska USA’s newly-constructed Qualtrics Tower spans 701,000 SF. Tenants include Qualtrics, Indeed, Dropbox, and co-working firm Spaces. (KI)
- Invictus Real Estate Partners has purchased the remaining 90 percent stake in The Waypointe at 515 West Avenue in Norwalk, Connecticut from Carmel Partners. The two-building complex, which includes 56,000 SF of ground floor retail and restaurant space, opened in 2015. Its apartments are currently 93 percent occupied, while the retail space is 74 percent leased. The deal valued the asset at $157 million. (TRD)
- As part of its ongoing industrial real estate expansion, PGIM Real Estate has acquired a 40 percent interest in a 5.4 million-square-foot, 12-complex industrial portfolio valued at $700.5 million. PGIM acquired the stake in the portfolio through a recapitalization of the interest in a JV with partner IAC Properties and a subsidiary of Perlmutter Investment Company. At that valuation, the deal works out to a 4.7 percent cap rate. The portfolio includes 30 industrial properties spread throughout the 12 complexes, which altogether are 97 percent leased. (CO)
- July Residential and Firm Capital Apartment REIT have acquired North Pointe at 5735 29th Avenue in Hyattsville, Maryland from FCP for $37.5 million. The 19-building apartment community contains 234 units. (CO)
National Leasing Roundup
- Netflix has signed a 171,000-square-foot office lease in Burbank near major competitors like Warner Brothers and Walt Disney. Netflix’s new space is at 2300 West Empire Avenue near the 5 Freeway in Los Angeles County. Earlier this month, CEO Reed Hastings told WSJ that he expects employees back in the office once a coronavirus vaccine is available. (CO)
- Logistics and storage firm Mega Lion has signed a 132,423-square-foot lease at 13021 Leffingwell Road in the Mid-Cities submarket of Los Angeles County. Golden Springs Development owns the property. Asking rent on the five year lease was reportedly $0.90 per SF, triple net. (CO)
Real estate sales set record in Powell River – Powell River Peak
Residential real estate sales in the Powell River region in August 2020 were significantly higher than those of the previous year.
According to Powell River-Sunshine Coast Real Estate Board president Neil Frost, August featured a significant year-over-year gain and marked a new sales record for that month.
“Home sales in the region continued to rebound in August, smashing the previous record for the month set back in 2005,” said Frost. “New supply is also on the rise but is not keeping pace with demand. As a result, the market has tightened significantly and the imbalance between supply and demand is putting upward pressure on prices in the region.”
In August 2020, the average single-family home sold for $464,655 and was on the market for an average of 60 days. In 2019, the average single-family home sold for $394,763 and was on the market for 70 days.
Frost said August statistics regarding vacant land speak to how busy the market has been, and that more people are turning to building. Some people coming from out of town want new properties or are not finding what they want, according to Frost.
He said the median house price of $419,000 is probably accurate. He said that is the going price of a decent family home in Powell River.
“We have seen a bit of a bump here over these past couple of months,” said Frost. “The activity has kind of pushed prices up. It’s still active and there were quite a few sales in the higher price range in August, which really pulled average prices up.”
In terms of single-family homes, in August 2020, there were 48 homes sold, valued at $22,768,111, compared to 28 homes, valued at $11,053,358, in August 2019.
There were three single-family mobiles and manufactured homes, valued at $598,900, sold in August 2020, compared to five units, valued at $668,000, in August 2019.
For single-family condos, apartments and duplexes, there were four sold in August 2020, valued at $1,178,200, compared to eight, valued at $2,090,500, in August 2019.
Totals for residential properties for August 2020 were 56 units valued at $24,545,211, compared to 41 units, valued at $13,811,858, in August 2019.
For non-residential, in August 2020, there were 10 parcels of vacant land sold, valued at $1,761,000, compared to five parcels in August 2019, valued at $363,000.
In terms of industrial, commercial and institutional, there were three units sold in August 2020, compared to no units the previous year.
Frost said Texada Island has been active, with affordability and the lifestyle it offers over there.
In terms of year-to-date residential sales comparisons between this year and last, in 2020, there were 283 homes sold, compared to 274 in 2019.
“In a year where we thought we were going to sell less, we’re pleasantly surprised that we’re on track to do the same kind of sales,” said Frost.
According to the buyer and seller statistics for August 2020, there were 30 local buyers and 25 out of area buyers. Statistics for all of 2020 show 51.1 per cent local buyers and 48.9 per cent out of area buyers.
In terms of sellers in August 2020, 49 were local and 10 were from out of the area. The year’s statistics show 87.3 per cent of sellers were local and 12.7 per cent were out of area.
Real Estate Roundup 9.25.20 – Real Estate Daily Beat
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