Category: B.C. Real Estate News

Here is an article published today by Derrick Penner of the Vancouver Sun.

Sales in British Columbia’s real estate market so far in 2008 are about half of what they were a year ago, although the pace has risen from a particularly dismal low point, according to the British Columbia Real Estate Association.

In February, B.C. recorded 3,653 sales through the Multiple Listing Service, down almost 47 per cent from February 2008. The average property price of $421,023 was down 12 per cent. Over the first two months, B.C. saw 5,768 sales, down 51 per cent from the same period in 2008. The pace of sales, however, increased 17 per cent in February, association economist Cameron Muir said in an interview, to a seasonally-adjusted annualized rate of 47,000 sales from the low of 40,200 units in January.

Recreation-oriented markets such as the Okanagan, Kamloops, Kootenays and Vancouver Island — which boomed in recent years due to an influx of wealthy Alberta buyers — are seeing some of the steepest declines. “That’s not surprising,” Muir said. “Recreational-property and investment buying decisions are much more easily put off.” Alberta is suffering its own economic contraction with consequent job losses, and Muir said Albertans have seen their property markets and values decline, curbing their enthusiasm for discretionary purchases.

The Okanagan Mainline board, which includes Kelowna, saw 230 MLS sales in February, down 60 per cent from the same month a year ago. The region’s average price of $276,776 was down 28 per cent from February 2008.

In Kamloops, MLS sales plummeted by almost 60 per cent to 92 units compared with the same month a year ago. There, the average price was down almost 14 per cent to $277,088.

The South Okanagan board, which includes the summer hot spots of Osoyoos and Penticton, saw sales drop almost 59 per cent to 61 units in February. The average price dipped just over 10 per cent to $283,634.

Vancouver Island saw its sales dip almost 50 per cent to 328 units compared with February 2008. The average price was down just over 11 per cent to $291,085.

Muir said that given the weakness of B.C.’s economy, he would expect real-estate sales levels to be similar to those during the downturn of the late 1990s. He said that means there is room for more activity in the market from current levels, which mirror the recession of the early 1980s. He said buyers are being drawn in by declining prices, and low mortgage rates have helped reduce the carrying cost of an average home to a three-year low. However, Muir still expects 2009 sales to drop from 2008 levels and has forecast that the decline will be about nine per cent. “A rebound in home sales [in 2009] over past highs is not on the radar,” Muir added.

I found the article below on the Vancouver Sun’s website by Derrick Penner. The Kamloops real estate market has recently seen a bit of a pick up in the number of buyers actively looking for a home as well as the number of sales reported. I personally have seen an increase in the number of first time home buyers beginning to search. In the last few weeks there has been a few good days of reported sales from the Kamloops Real Estate Board, but we are still reporting sales down around the 2003 levels. Read the article below detailing the Ipsos Reid survey on the conditions of the real estate market in BC.

The poll found that some 71 per cent of respondents said it is a somewhat good or very good time to buy real estate. More people thinking about buying real estate, but majority say it’s not a good time to sell property. In November, only 60 per cent of respondents told Ipsos Reid it was a good time to buy. In the latest poll, 82 per cent said now is not a good time to sell a home. Hanson Lok, senior research manager at Ipsos Reid in Vancouver, said as market conditions improve for buyers, there also seems to be a growing number of British Columbians gathering on the sidelines to contemplate buying new homes.

Three in 10 respondents said they were considering a purchase in the next two years, up from 20 per cent when the same question was asked in November. “We are seeing a greater number of first-time home buyers in particular looking to take advantage of more affordable homes, incentives from the government and lower costs of borrowing,” Lok said in a news release. The new poll also found that British Columbians’ expectations for falling prices have been muted since November.

While the B.C. Real Estate Association has forecast price declines of 13 per cent in 2009 and Canada Mortgage and Housing Corp. is predicting drops of around 10 per cent in Metro Vancouver, only 42 per cent of respondents to the recent Ipsos Reid poll said they expected prices to be lower 12 months from now. That is down from November, when 57 per cent said prices would be lower a year later.

Across the Lower Mainland, including Metro Vancouver and the Fraser Valley, respondents’ expectations were for a further 2.3-per-cent decline in prices. Across the rest of B.C., respondents believe prices will drop another four per cent. Statistics Canada reported new-home price data for December showing that in Metro Vancouver, prices had fallen 2.3 per cent from the same month a year ago.

Vancouver’s price decline was the fourth steepest among cities on the downside of their cycles following Victoria, Calgary and Edmonton, which saw the steepest year-over-year drop of 8.2 per cent. Victoria’s decline in December was about three per cent from the same month a year ago. Nationally, the housing price index declined by one-tenth of a percentage point from November to December, which weighed on gains made in the measure over the year. The national HPI for December was up 0.4 per cent compared with the same month a year ago.

I found this article recently by the Financial Post and thought it was worth posting…..

I’ve been hearing a lot of soothing sounds of late coming from the real estate and construction industries. “All is well,” they seem to say. “Don’t panic,” they encourage.

Two days ago, the Canadian Home Builders’ Association, a lobby group, insisted “there is absolutely no merit” in drawing a parallel between the U.S. real estate meltdown and the “cooling” market we are currently experiencing.

In mid-December, meanwhile, the Canadian Real Estate Association announced that national averages aren’t down as much as previously thought, and that it would be changing the methodology by which it calculates home prices, taking into greater account the rural homes that haven’t depreciated as quickly.

Taken at face value, these recent press releases might suggest that now was a great time to buy a house — a convenient conclusion for home builders and real estate agents.

But don’t you believe them. Maybe it’s appropriate that the CREA is changing its methodology to be more inclusive, but now seems to be an awfully convenient time to be doing so. And while it’s true that the Canadian housing boom was not propelled by the loose lending practices and low interest rates seen in the U.S., that doesn’t mean our boom was any less heated. In Canada, housing prices skyrocketed alongside a commodities boom that brought enormous wealth, in particular to western provinces.

So what do you suppose might happen when such a commodities boom crashes down to earth, as has happened over the last four months? If you’re still not convinced, take a look at the numbers below. They show six years of annual housing prices, leading up to their respective peaks, in the United States, as well as four Canadian cities. Also included are the most recent prices, to give you a sense of how far we’ve come down so far. Numbers are from the U.S. Census Bureau and the CREA — before they decided to revise their methodology.

United States
March 2002 – US$227,600
March 2003 – US$233,100 (2.4%)
March 2004 – US$262,900 (15.5%)
March 2005 – US$288,500 (26.8%)
March 2006 – US$305,300 (34.1%)
March 2007 – US$322,100 (41.5%)

Vancouver
May 2003 – $319,783
May 2004 – $370,545 (15.9%)
May 2005 – $418,757 (31%)
May 2006 – $518,176 (62%)
May 2007 – $591,722 (85%)
May 2008 – $624,639 (95.3%)
Most recent – $510,465

Calgary
July 2002 – $196,472
July 2003 – $209,932 (6.9%)
July 2004 – $220,978 (12.5%)
July 2005 – $245,704 (25.1%)
July 2006 – $357,831 (82.1%)
July 2007 – $436,739 (122.3%)
Most recent – $384,243

Toronto
April 2003 – $292,783
April 2004 – $321,131 (9.7%)
April 2005 – $342,032 (16.8%)
April 2006 – $366,683 (25.2%)
April 2007 – $379,025 (29.5%)
April 2008 – $398,687 (36.2%)
Most recent – $368,582

Montreal
July 2003 – $190,402
July 2004 – $218,313 (14.7%)
July 2005 – $222,972 (17.1%)
July 2006 – $253,420 (33.1%)
July 2007 – $263,018 (38.1%)
July 2008 – $277,703 (45.9%)
Most recent – $263,734