Slide continues but recovery is expected in 2009
Suzanne Fournier
Province
Housing sales are predicted to keep sliding next year. Province file photo
Residential sales will continue to slide this year, declining 28 per cent to only 73,700 units this year, according to the B.C. Real Estate Association’s fall 2008 Housing Forecast, released yesterday.
That is down from 102,805 units in 2007, although a four-per-cent increase to 76,500 units is forecast for 2009.
Shaky consumer confidence fed by rising fuel prices and the global financial crisis have caused many B.C. residents to put off buying a home this year. But optimistic realtors are confident the tide will start to turn early next year.
“A year ago, homebuyers in B.C. were competing against each other in auctions for available houses, but now homesellers are competing for buyers,” noted BCREA chief economist Cameron Muir.
Still, sellers who are flexible, with homes that show well, “should sell,” said Muir. “Just keep a very sharp pencil.”
Muir noted that “the erosion of consumer confidence that began with rising fuel prices earlier in the year is continuing, and the global financial crisis has B.C. households concerned about their own finances.”
However, B.C. is on a much stronger footing than homeowners in the U.S., he said.
“People are facing foreclosures in the U.S. because of job losses, subprime mortgages and rising costs,” said Muir.
Unlike Merrill Lynch economists Carolyn Kwan and David Wolf, who warn Canada will suffer the same fate as the U.S., only with a two-year time lag, Muir said, “I don’t believe Canada‘s following in lockstep with the U.S. at all.”
A weaker B.C. economy is expected to push unemployment from 4.4 per cent to 4.9 per cent in 2009, Muir noted, but other economic indicators here are relatively strong.
Realtors facing owners taking homes off the market and shaky buyers weren’t surprised by the BCREA fall forecast.
“There’s no question prices are declining and probably will until the end of the year, but 2009 will be very strong,” said Shafik Ladha, a RE/MAX Westcoast realtor in business for 19 years who has already sold 97 homes this year.
“I’m tired of all this doom and gloom in the headlines because it doesn’t really apply to us here. Yes, there’s been a price correction, but in this market, when you sell low, you can also buy low, and interest rates are low, too.”
Grace Kwok, owner of Anson Realty Inc., acknowledged that “sales are definitely lower because with all the uncertainty in the world, the appetite to buy is not as strong.”
But she predicts, “Wait a few weeks until all the election headlines are gone.”
Kwok said she has advised some clients that “if there’s no urgency to sell, don’t list it right now,” but points out that as inventory declines, sales will pick up in price and quantity.
“In a few weeks when the panic factor dies back, prices will correct,” says Kwok, one of Metro Vancouver’s top 10 realtors.
© The Vancouver Province 2008
