Greater Vancouver house prices should soften over the next few months as falling sales and a higher volume of listings work against future price hikes, Real Estate Board of Greater Vancouver president Andrew Peck said Thursday.

The board reported that Greater Vancouver house sales continued their recent slide last month, with 2,735 homes sold on the Multiple Listing Service in October — a four-per-cent decline from September sales and 27.4 per cent lower than October 2003.

The recent decline in sales activity has dropped total sales during the first 10 months of this year to slightly below the record pace set during the same period last year — down to 32,068 sales from 32,364 a year ago.

Peck said the market had to take a breather from the hectic activity that took place last year, when low interest rates and a shortage of listings created conditions where properties received multiple offers and sold for more than their asking prices.

“There’s only so much room for that kind of activity,” Peck said in an interview from Florida, where he attended a national housing conference. “Now we have a really good solid real estate market.”

Peck said Greater Vancouver house prices shot up quickly in the past two years because interest rates fell so rapidly. Peck believes higher interest rates and rising listings will work against future price hikes.

“I think you will see prices starting to soften over the next little while,” Peck said. “Many sellers had unrealistic expectations and with interest rates rising a bit, buyers are being more careful.

“They’re saying that if [sellers] don’t take their offer, they won’t be as stressed about it because something else will come on the market tomorrow.”

Board statistics show the number of MLS listings during the first 10 months of this year rose by about 19 per cent to 48,900.

The board said the benchmark price of a detached home in Greater Vancouver has increased by 10.7 per cent in the past year to $493,200. The benchmark price of an attached home is up 13.6 per cent to $324,300 while the benchmark price of an apartment has risen 15.1 per cent to $243,100.

Burnaby realtor Bruce Miller said the market peaked in June this year, when activity was “frenzied” and sellers had unrealistic price expectations.

“June prices set a new benchmark and everybody hiked their prices up by 10 or 15 per cent above the most recent comparable sale, which put them a lot higher than they should have been,” he said.

Miller, with Sutton Group Priority Realty, said homeowners who were serious about selling dropped their asking prices fairly quickly to get in tune with what was happening in the market.

“Now I’d say we’re in an above-average active market,” he said. “It’s not a red-hot market any more.”

Miller said that in the Burnaby/New Westminster/Coquitlam area now, townhouses and apartments priced from $150,000 to $200,000 are selling strongly and probably account for about 35 per cent of all sales, up from 20 per cent a few months ago.

Single-family homes are still the most popular properties, though, and those priced between $350,000 and $400,000 are also strong sellers, he said.

HOMES SALES DOWN, BUT PRICES KEEP GOING UP:

Greater Vancouver Real Estate Board October home sales, including apartment properties, dropped 27.4% compared to October 2003. The MLS Housing Price Index, meanwhile, showed significant gains from October 2003 to October 2004.

DETACHED SALES

-33.0%

ATTACHED SALES

-20.5%

APARTMENT SALES

-24.7%

DETACHED PRICES

+10.7%

ATTACHED PRICES

+13.6

APARTMENT PRICES

+15.1

Source: Greater Vancouver Real Estate Board

© The Vancouver Sun 2004