Derrick Penner
Sun
The descent from real estate market peaks in the Lower Mainland continued in October with lower year-over-year sales, higher listings and some lower prices.
Greater Vancouver’s real estate board reported 2,722 multiple-listing-service sales in October, which was higher than September, but a 12.2-per-cent drop from October 2005.
New listings in Greater Vancouver were up 20.3 per cent to 4,862 units compared with the same month a year ago.
And nine Greater Vancouver communities recorded median selling prices that were lower than September’s median prices, though still significantly higher when measured year-over-year.
On Vancouver’s east side, for instance, the median detached house price was $584,250, down 5.8 per cent from September. In Burnaby, the $620,000 median house price represented a 5.1 per-cent decrease.
In the Fraser Valley, MLS sales were down 28 per cent from October a year ago at 1,287 transactions. The Fraser Valley’s inventory of listings increased 27 per cent to 5,644 units compared with October 2005.
In October, average Fraser Valley single-family home prices dipped 1.3 per cent to $487,238 compared with September. However, year-over-year, prices remain between 13 per cent and 28 per cent above October 2005.
Sebastien Lavoie, an economist with TD Bank Financial Group, said price shifts are a good sign in Lower Mainland markets, which the bank has characterized as at risk of becoming overvalued.
“That just lowers the risk of any major cooling off of the housing market.”
Other analysts, however, are wary of reading too much into variations between month-to-month price changes.
Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.’s Sauder School of Business, said there weren’t enough transactions in the communities that saw median price declines to make conclusions about trends.
Somerville added that month-to-month median price shifts can be skewed by the types of properties sold during the month.
If fewer high-priced homes sell in a month, that will pull the median price down. And Somerville said typically, in a market slowdown the luxury end of the market suffers the most volatility in both sales and price.
Somerville noted that B.C.’s employment situation is still strong and mortgage rates are still favourable, which help support the housing market.
It is now clear that Lower Mainland markets are slowing down, but “[there aren’t] the conditions out there that would presage a price collapse,” he said.
Cameron Muir, a market analyst with Canada Mortgage and Housing Corp., said current high prices in the Lower Mainland are cutting into housing demand.
Muir added that the current provincial economic upswing, with job growth, increasing wages and positive population migration, is helping to offset a housing downturn.
“Those are very strong [economic] fundamentals,” Muir said. “The only fundamental not working is [housing] prices.”
Rick Valouche, president of the Real Estate Board of Greater Vancouver, said he doesn’t believe there has been any moderating of prices. Valouche said there are still too many bidding wars happening and there is still too much demand relative to the number of listings available.
Valouche added that he would consider 1,500-1,600 sales per month on an inventory of 18,000 listings to be a balanced market for Greater Vancouver. Active listings, he said, have just reached over 14,000 in recent months.
Dave Rishel, president of the Fraser Valley Real Estate Board, was wary of using October’s dip in average prices from September as evidence of anything. However, he added that prices may be beginning to adjust to the changing demand and supply situation
“We always anticipate that markets will have their ups and downs and periods of adjustment,” Rishel said. “This is just one of those adjustment periods.”
© The Vancouver Sun 2006
