A chill swept Greater Victoria’s summer real estate market last month when both the volume of sales and average prices dropped significantly.

In July, 527 properties changed hands — down 43.5 per cent from the same month in 2009 during a red-hot market. The total value of July sales through the Victoria Real Estate Board came in at just over $257 million, a drop of 40 per cent compared to the same month last year.

Average prices for single family houses, condominiums and townhouses all slid month-over-month, the board said Tuesday.

The average price for a single-family house in Greater Victoria was $615,004 in July, down from $649,280 in June.

The region had 16 sales of more than $1 million, including one on the Gulf Islands.

Condominiums averaged $322,905 in July, down from $331,131 in June.

Inventory dropped to 4,477 in July from 4,730 in June, and the number of homes for sale was still 23 per cent more than the 3,632 of July 2009, the board said.

Real estate has been volatile in recent years as buyers rushed to purchase and joined bidding wars, followed by a cooling off when the recession arrived. Sales were slow at the start of last year, building up to strong numbers as buyers ventured back into the market.

But more recently, sales have been slowing and inventory rising.

Factors include mortgage interest rate affordability, tighter rules for low-equity buyers and more fragile consumer confidence, possibility influenced by the arrival of HST in July.

Randi Masters, president of the Victoria Real Estate Board, called the 2000s “rocket years” as sales numbers and priced climbed repeatedly.

The capital region’s market will become more balanced, similar to the late 1990s, she said. Sales will pick up but, “it is not going to be smoking hot like July of last year.”

Spring is typically Victoria’s strongest market when more homes are up for sale, gardens are blooming, and buyers start shopping, Masters said. The spring market starts solidly in February. July, August and into September normally sees some cooling off because people are on holidays.

Sales slumped for the area north of the Malahat as well. Single-family home sales decreased to 347 in July, down by 35 per cent from 536 sales in July of 2009, the Vancouver Island Real Estate Board said. June reported 415 sales.

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