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Posts tagged ‘predictions’

B.C. Housing Market Spring Forecast

Expect sales volume to ease, prices to increase more slowly

BCREA Logo

The British Columbia Real Estate Association (BCREA) has released its semi-yearly housing market forecast for the province. Despite economic troubles elsewhere in the country, B.C.’s economy is expected to remain strong and to outpace many other areas in Canada in terms of growth through 2009.

Provincial sales will dip to 93,800 in 2008 (a 9% drop) and 92,000 in 2009 (a further 2% drop). Eroding affordability and weaker economic growth are cited as reasons for the expected decline. Still, interprovincial and international migration will continue to underpin demand for housing in B.C., with individuals drawn to our province by robust job growth, climate, and amenities. The average residential price in B.C. is forecast ro increase 9 per cent to $479,000 this year, and a futher 4 per cent to $499,000 in 2009.

Regionally, BCREA predicts that Victoria MLS® sales will fall to 7800 units, a decline of 7 per cent from last year’s second-highest-on-record 8403 sales. Sales will remain above the ten-year average of 6750 units. The report notes that 12,000 jobs were created in the Victoria area in the first quarter of 2008. As I’ve said before, as our area diversifies its economy beyond government, military, and tourism, more and more people will continue to move here, attracted by competitive salaries and our Island way of life. The report forecasts an overall 10 per cent increase in prices this year, but notes that most of that growth has already occurred, and to expect single-digit growth for the rest of the year.

I think the most interesting prediction in the report is with housing starts. The report forecasts overall housing starts to drop 9 per cent this year (after a 6 per cent decline in 2007). Citing tight construction labour markets, higher credit costs, and trepidation on the part of developers, the BCREA feels that current new home inventories will be depleted, resulting in a higher level of construction activity in 2009 and 2010.

One thing to remember is that the BCREA’s report is based solely on MLS® data, and would not include sales of new homes by the developer’s private sales team, for example.

What do you think about the report? Comment below!

The full BCREA report can be found here.


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2007: A Surprising Year for Victoria and Sooke Real Estate

Year-end and December 2007 Statistics Released

The Victoria Real Estate Board has released the December 2007 and year-end statistics:

Real Estate Records Broken in 2007

The value of all property transactions through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) hit a new record of over $4.1 billion in 2007, up from $3.3 billion in 2006. The value of single family home sales was over $2.5 billion while the value of condominium sales was over $756 million. Victoria Real Estate Board President Tony Joe noted that both sales and prices for all major property types increased last year. “Last year was another exceptional year for the local real estate market. The total number of sales increased over 12 per cent while the overall average price for single family homes rose 8.5 per cent; the average for condominiums rose over 11 per cent and the average for townhomes rose 10.5 per cent,” said Joe.

Meantime, the sale of 14 single family homes in Greater Victoria over $1 million pushed the average price to a new record high of $624,450 last month [Note: The sale of an island completed last month for $7 M, which would have skewed the average considerably – Tim] ; the median price, however, was considerably lower at $536,000. “It’s always important to bear in mind that the average price in a given month can often be significantly affected by the sale of high-priced homes,” noted Joe. The six-month average for single family homes in December was $581,419.

The average price of all condominiums sold in December was $332,793; the average for the last six months was $319,980. The median was again lower at $292,900. The average price for townhomes sold last month was $445,960; the average for the last six-months was $415,648. The median price was $387,900.

There were 408 MLS® sales last month, up from 385 sales in December of last year. There were 623 sales in November. Sales last month included 202 single family homes, 120 condominiums, 46 townhomes and 8 manufactured homes.

There were 2,799 properties listed for sale on the MLS® system at the end of last month, up from the 2,650 properties in the same month a year ago.

 

Summary Report and Graphs

Monthly Sales Summary
Average Selling Price Graphs
Active Listings, New Listings and Sales Graphs

At the end of 2006, listings had been steadily increasing, and sales were lower than the booming year of 2005. Everyone was on edge for expectations for 2007. The year surprised us all, with interest rates rising by one-quarter per cent and then being cut by that one-quarter in December. Steady, low interest rates breed consumer confidence and keep home ownership possible as increasing prices erode affordability. An increase in good-paying jobs, record-low unemployment, and migration and investment from out of the area all helped to push the market to record heights this past year.

What does 2008 hold? I see steady price increases, but on a slower, more moderate scale. As prices increase, affordability continues to be eroded. The Bank of Canada meets on Jan 22, with David Dodge expected to announce a cut in interest rates as his final duty before stepping down as governor. The continued diversification of the local economy, with more high-tech jobs and the decline in tourism from the U.S. being replaced with domestic and international visitors, will drive migration to this corner of the country and keeps our market on sound financial footing.

Sorry, bubble-blowers, there just isn’t one here to burst.