Consumer Confidence Key to Housing Market Conditions – British Columbia Real Estate Association. Fall Housing Forecast
Vancouver, BC – October 29, 2008. The British Columbia Real Estate Association (BCREA) released its fall 2008 Housing Forecast today. BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 28 per cent from 102,805 units in 2007 to 73,700 units this year. A modest 4 per cent increase to 76,500 units is forecast for 2009.
“The erosion of consumer confidence that began with rising fuel prices earlier in the year is continuing, as the global financial crisis and volatile equity markets have BC households concerned about their own finances,” said Cameron Muir, Chief Economist. A weaker provincial economy is expected to increase the jobless rate from 4.4 per cent this year to 4.9 per cent in 2009. “While some job losses will occur next year, BC households will remain on a relatively solid financial footing,” added Muir.
The average MLS® residential price is forecast to increase 3 per cent to $453,000 this year. However, home prices peaked in the first quarter and have been edging lower for several months.
For 2009, the average price is forecast to decline 9 per cent to $413,000, with most of the decrease having already occurred by the end this year. Downward pressure on home prices is expected to ease by the second quarter of 2009, as an increase in affordability and consumer confidence induces a modest growth in sales. The inventory of homes for sale is also expected to decline in the coming months as potential home sellers delay putting their homes on the market until conditions improve.