Vancouver Real Estate Blog

British Columbia's Economic and Fundamental Business Indicators -part 4/4

Out of all the indicators out there, one that remains rather robust and less understood is Housing Starts. The biggest problem with the section is that Housing starts always "Lags Behind" what the market is doing. Simply because builders do not want to build unless their is a demand. Once there is a demand, they then have to have land ready to build on, or more precisely buy the land, then start the application process for their project, lets say a high rise in down town Vancouver. Start, draw and submit architectural drawings, meet with the board of variance to get the project approved, investigate any environmental concerns,etc. to get it to the point of getting a housing permit.

In the meantime, the British Columbia market place is thirsty for inventory and the only thing out there is re-sale homes. Buyers have no choice, so they must buy these homes as no new one are out there on the market. So housing starts next year in 2010 are expected to increase 46% compared to 2009. If what I am seeing in the market place is any indication, I think that we will see housing starts to rise sharply to keep up with demand.

British Columbia's Economic and Fundamental Business Indicators - part 3/4

British Columbia's Employment rate as depicted from Stats Canada show how BC is already climbing out of this recession. The fall started in the later part of 2008. But has rebounded and showing strong gains. The BC employment rate can be attributed to various factors. Increase in migration to BC, MLS housing market sales are up 20% compared to 2008, Consumer confidence is up, Retail Trade Sales are showing an increase, Low consumer mortgages for homes and new business, Housing starts in BC are expected to increase 46% in 2010 and economic and greater stability in the BC housing industry/market has arrived and predicted to get better in 2010 as the economy of BC picks up. 

British Columbia's Economic and Fundamental Business Indicators -part 2/4

How did we get here? Everyone seems to want to know. From March of 2008 we saw a downward trend. In other countries and other parts of the world, we saw massive declines in housing prices-namely the the United States for example. We all saw and witnessed the collapse of the Financial Institutions and Wall Street.

But how did we survive so well? That answer put simply is in how our economy works with the rest of the world and frankly how it works independently at the same time. British Columbia unlike the rest of Canada and the USA has a different and flexible market place. Where there are the mega corporations and an inflexible corporate structure and a philosophy of "same old same old". BC has a very young and on the most part, a very small corporate structure, where flexibility is everything. This in turn allows these smaller companies to adjust in a moments notice causing less people to be tossed out of work, as these people are represented by families and are not just numbers to a big corporation. The entrepreneurship is alive and well here in British Columbia.

So, as the unemployment rate rose around the world dramatically. BC while experiencing some of that, was never  hit as hard as everyone else. That being said, we also had an influx of migration over the year of approximately 60,000 people expected for the 2009 year end, historically low interest rates, inventory levels of homes starting to falling, pent-up demand from buyers, a massive new housing start decline all added to produce a demand that out paced supply on re-sale properties. That's economics 101.

So where do I see price levels reaching? Let me take you back 14 years ago when I wrote an article to the home owners of Dunbar. Back then prices for a standard lot sold for about $450,000.  I predicted home prices surpassing the $1 million dollar mark. Yes I got a lot of calls telling me that would never happen and even some saying "It Would Not Happen In A Million Years". Well as time went on the market told the real story. So predicting the future home prices, I would say given our geographical location, lack of usable land, the natural beauty, the mountains to the north, the mildest climate in canada, the Baby Boomer's, economic ties to China, Japan and other Asian Pacific country's, population growth, employment opportunities and life style. I would say that in 10-20 years from now what we are saying are extreme prices for homes in the area, will be a drop in the bucket in years to come. Do not forget the power that the media has and over the 2010 Olympics their will be billions of advertising messages going out to the world about Vancouver and British Columbia as a whole. Do you remember what Vancouver was like before Expo?? Now think of how far we have come from those days. This is just the beginning. Like everyone says.... Hold onto Real Estate. Because if you are not in, then you are out.....

British Columbia Real Estate Association

BCREA Residential sales are estimated to increase by 20% compared to 2008 sales by the end of the year. 2010 sales are supposed to outpace 2009 sales by 8%. The Province of british Columbia is expecting to post a new record sales price of 2% higher to end at $463,200. Forecasts indicate a 4% higher sales price for 2010. 

The full Fall 2009 Housing Forecast is available at: www.bcrea.bc.ca/economics/HousingForecast.pdf.

Residential Home Sales in British Columbia Climb - September 2009

According to the British Columbia MLS, residential sales in the province climbed 68% in September compared to the same month last year. MLS sales price in British Columbia climbed 15% to $474,169 from $412,149 from September 2008. The hot spots for residential sales is the Lower mainland and Victoria.

To read more following this link:www.bcrea.bc.ca/news_room/2009-09.pdf.

British Columbia's 3rd Quarter 2009 update for Residential Sales

A client of mine asked me "Where are we with regards to sales for this year" I replied by saying that we are doing very well, so much better than anyone could have predicted 6 months ago. Here is some of that conversation with stats and links for more information.

I went on to say that the BCREA (British Columbia Real Estate Association) says " BC home sales are the brightest lights in the economy.

1) MLS sales are forecasted to climb 15% from 68,923 units in 2008 to 79,400 in 2009. And a further prediction for sales to increase 6% to 84,200 units in 2010.

2) Chief Economist Cameron Muir said "Home sales have doubled since January, with prices edging higher in Metro Vancouver and Victoria.

The full BCREA Housing Forecast Update is available at: www.bcrea.bc.ca/economics/HousingForecast.pdf.

Balanced Playing field for Buyers & Sellers in Vancouver & Victoria

We have been waiting for some great new that can be substantiated. From this graph the Listing to Sales Ratio has pushed it's way into the area of balance. I believe this is the best for all Buyers and Sellers alike. It is what I like to call a balanced playing field where the number of Sellers and Buyers are equally matched. This can also be looked at as a healthy representative in the Market Place. In the recent past (late 2008- early 2009) we experience a market where their were no buyers and prices fell. If you look at the years of 2005 - 2008 we saw a market where homes were selling faster, in multiply offers and prices were rising. Note: From what I see in the market place and projecting out into the future I see a further upswing in the market place with prices moving up and eroding our losses from the previous year.

The following are a few points of interest for everyone.

1) British Columbia Real Estate Association (BCREA) reports that MLS Residential Sales rose 53% to 10,051 in July 2009, compared to the same month last year.

2) Chief economist for BCREA Cameron Muir state "Record home sales in Metro Vancouver and Victoria propelled the province into balanced conditions".

3) Year to date MLS sales declined 10% to 21 billion over last year.

4) 46,380 homes were sold in the first 7 months 2009. That's down 6% from 2008 figures. The Average MLS price is still down 4% to $451,758

For the complete news release, including detailed statistics, follow this link: www.bcrea.bc.ca/news_room/2009-07.pdf.

Canadian home resale prices rise

According to this report from Reuters, resale prices for Canadian homes rose to their highest average on record in May as consumer confidence strengthened. The increase was more favorable in British Columbia and Alberta. 

The average home price last month rose 0.4% to $319,757, topping the previous record set a year ago and the average price recovered 16.4% from the January low. 

British Columbia Housing Market in Recovery

The British Columbia Real Estate Association (BCREA) reported today that housing market conditions have improved more rapidly than expected. 

As a result, BCREA has revised its home price forecast upwards, reflecting greater price stability through the balance of the year. The average price in British Columbia for a residential home is forecast to decline 8% to $420,600 in 2009, instead of 13% originally forecasted at the beginning of the year. 

Residential sales are forecast to decline 12% this year as a result of a weak first quarter. However, stronger consumer demand is expected to continue for the balance of the year and through 2010. Residential sales in 2010 are forecast to climb 10%.

Average Price of Homes in BC Drops 12%

The average price of a residential home in British Columbia fell 12% in March 2009, compared with March 2008, according to the British Columbia Real Estate Association. But more interestingly, home sales in British Columbia increased 24% in March 2009 over the previous month, the second consecutive monthly increase. In terms of dollar volume, in March 2009, residential sales dollar volume declined 35% to $2.3 billion compared with the same month last year. The average price of a residential home in the province is now $424,122.