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Posts tagged ‘housing bubble’

BC Home Sales top $45 Billion in 2007 – A New Record

It’s a brick - na na na na - HOUSE2007 surprised us all as an exceptionally strong year for home sales in the provincial real estate market. I think if you had asked me at the end of 2006 if I thought that 2007 would break any records for home sales, I would have told you (politely) that you were crazy. Below is the news release from the BC Real Estate Association, along with a link to detailed statistics. –Tim

BC Home Sales Smash Record Book

Vancouver, BC – January 11, 2008.British Columbia Real Estate Association (BCREA) reports residential sales volume on the Multiple Listing Service® (MLS®) in BC climbed 19.5 per cent to $45.1 billion in 2007, the highest level ever recorded. Residential unit sales increased 6.4 per cent to 102,811 units in 2007, only the second time BC home sales have exceeded the 100,000 unit mark (a total of 106,310 homes traded hands in 2005). The average MLS® residential price in the province reached a record $439,121 in 2007, up 12.3 per cent from 2006.

“Strong consumer demand buoyed by employment growth, rising wages and migration was a significant factor in BC’s housing markets last year,” said Cameron Muir, BCREA Chief Economist. “In the province’s major urban centres, sales activity reflected increasing demand for condominium apartments and townhouses. The largest gains in home prices occurred in the Kamloops, Okanagan and Kootenay markets where a legion of recreation, retiree and investment buyers put pressure on existing home inventories.”

“BC housing markets will experience less frenetic activity in 2008,” noted Muir. “Eroding affordability, rising new home completions adding to inventories and weaker economic growth are expected to provide a moderating influence this year.”

MLS® residential sales volume in December increased 24.2 per cent to $2.19 billion compared to the same period last year. Residential unit sales climbed 8.8 per cent to 4,791 units over the same period. The average residential sales price rose 14.2 per cent to $457,825 in December compared to December 2006.

For more information, including detailed statistics, follow this link: www.bcrea.bc.ca/news_room/2007-12.pdf

Strong and Balanced Real Estate Market for Victoria in 2008

Incoming President’s predictions for next year, and my interpretation.

Tony Joe, 2008 president of the Victoria Real Estate Board, says the Victoria area housing market should remain strong and stable in the coming year. “During the past couple of years we have seen a return to a more balanced market. Demand remains remarkably strong and prices continue to rise, but at a more moderate pace than we have seen in recent years. Barring unforeseen circumstances, all indications point to continued strength and stability in 2008.”

Joe added that the Board will enhance its efforts to “go green” in the coming year. “One of the Quality of Life principles adopted by our Board is ‘preserving the environment’ and we intend to further our efforts to promote green values as part of the real estate transaction,” he said. Joe noted that the Board has had some initial discussions with the Ministry of Energy, Mines and Petroleum Resources about new ways to encourage home owners to heat their homes more efficiently. “We’ve volunteered to run a pilot project in Greater Victoria to inform buyers of the energy efficiency rating of various homes. We think growing public interest will prompt more and more sellers to do all they can to get their homes ‘energy-ready’ before they list for sale,” said Joe.

Joe noted that the Board has also volunteered with the Ministry of the Environment to run a pilot project in our Board area to notify buyers of a home’s ‘water-conservation measures’. “We think REALTORS® can play a key role by helping to rate a home based on its use of such items as low-flush toilets, low-flow shower heads, front-end loading washing machines and the use of grey water and rain water,” he added.

The 2008 Board of Directors is as follows: Tony Joe – President; Chris Markham – President Elect; Bev McIvor – Past President; Carol Crabb – Secretary-Treasurer. Other Directors are: Jane Logan, Randi Masters, John McVie, John Smith and Lorraine Stundon.

The 2008 Directors take office effective January 1.

This prediction echoes my personal comment about next year. I believe the continuing strength of the Canadian economy, and in particular, the continued strength and diversification of the Capital Region’s economy will keep prices steadily increasing, but at a slower rate.

The continuing economic woes in the United States and threat of a recession will force the Bank of Canada to maintain the low interest rates or reduce them further to avoid crippling the Canadian economy, which is surely to be affected by the situation in the United States.

Why is the Canadian economy booming, while the United states is suffering? I’ve written about this before, but it’s worth mentioning again. I read this post on a local real estate bear blog which, while clever, is wholly inaccurate. What the bubble-blowers here in Victoria fail to note is that the reasons for our continued economic success here in Canada are not the usual Canadian success stories of manufacturing in Ontario and Quebec brought on by a favourable exchange rate. The rise of the dollar over the last 24 months and the expansion of our economy is driven by global demand for what Canada has to offer: minerals, resources, oil and gas, wheat, technology. This time around is different. Prices here in Victoria are not inflated beyond their sustainability. These $100,000 price drops are not going to happen. Not in 2008, anyway.

The bears will gripe: “the statistics are skewed!” “too much marketing spin!” They will argue that as REALTORS®, we have a vested interest in making the statistics look favourable so we make more money. Of course, with any industry-produced statistics, there can be some professional bias. What they can’t ignore (but often try to) is that as REALTORS®, no one else works as closely with the buying and selling of real property in the area. No one else is as experienced as we are with what the numbers mean. And, no one else depends on an accurate and objective interpretation of the real estate statistics as a REALTOR®.

So, yes, we certainly do have a vested interest in accurate real estate statistics. Our livelihood depends on it.

I hope everyone enjoyed the surprisingly strong real estate market in 2007. Last December, the bubble blowers said 2007 would be the year. I’m not surprised they’re calling for it again this year.

Happy New Year, professionals!

Tim Ayres