Vancouver Sun – Real estate markets have slowed a bit more than the B.C. Real Estate Association’s (CREA) earlier predictions, prompting a downward revision in the group’s latest market forecast that includes a softening of prices.
Association chief economist Cameron Muir released his third-quarter forecast Friday, calling for Multiple Listing Service (MLS) recorded sales to dip to 79,500 by the end of the year, a seven-per-cent decline from 2009.
In the association’s second-quarter forecast, Muir had predicted British Columbia’s MLS sales would fall three per cent from the 85,028 recorded in 2009.
“We’ve seen consumer demand has tailed off in the summer months a little more than what was expected, and that accounts for the change in the overall unit-sales numbers,” Muir said in an interview.
Muir said the combination of higher levels of active listings than a year ago combined with slower sales has meant a softening of prices over the summer months. Most markets in B.C. have hit buyers’ territory, which means house hunters have more power to negotiate deals than sellers do to set prices.
The result is that Muir is forecasting by the end of 2011, although sales should increase, the provincial average price should edge off a new high achieved in 2010.
By the end of 2010, Muir estimates that the average price across all property types will hit $492,880, 5.8-percent higher than at the end of 2009. Most of that increase, however, represents a spike in prices that peaked about May.
In 2011, Muir estimates the provincial average will come back to $489,454, with price declines in the high-priced markets of Metro Vancouver and the Fraser Valley proving to be the biggest influence on that figure.
“The real question is on which side of zero [are prices going to] be,” Muir said.
To put markets into perspective, Muir said that while 2010 sales are expected to come in at just below the 10-year average, 2011 sales likely will hit it.
“My expectation is for a gradual improvement in sales over the next 18 months rather than the roller-coaster of activity we’ve seen over the past two years,” he added.