Home prices will drop less than expected, real estate group says
By Derrick Penner, Vancouver Sun, May 15, 2009
A recent surge in real estate sales has caused the Canadian Real Estate Association to sharply revise its expectations for price drops in British Columbia.
CREA, in its forecast released Thursday, estimated that B.C.'s average price will drop less than seven per cent over 2009, more than three percentage points off the 10.6-per-cent drop forecast in February.
CREA forecast that B.C.'s average price will drop to $423,300, instead of the $406,300 average it forecast earlier.
For 2010, CREA is now predicting that B.C. prices will start edging up again by almost two per cent compared with a 2010 drop of 0.6 per cent written into the February forecast.
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A different picture is emerging
A quick up-date on homes old posted for Richmond from May 01 to 15, 2009 using MLXchange sales data showed a very defferent picture. If Richmond is a representation of what is going on in other Greater Vancouver municipality, the weak sales in May could mean further price decline for housing. For the first 15 days in MAy, detached homes sales were at around 50% (32 compared with 65) and townhomes and condos/apartments at around 43% (60 as compared to 140) as compared to the first 15 days the previous month. The big drop in the sales number could be due to the market being depleted of the type of homes buyers wanted to buy.
The drop in sales could be due to less motivated buyers holding off buying for now. Most of these buyers believe home prices will continue to decline for some time. The surge in sales in April could be due to "pent-up" demand and seasonal "spring surge". We will know better at the end ot the month when the sales figures are released.
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