Active listings sit at the highest level since March 2009, economist says
Derrick Penner
Sun
Photograph by: Vancouver Sun Graphic, Vancouver Sun
When Maple Ridge’s Monika Novosadova went house hunting this spring, she faced an embarrassment of options, looking at 28 homes before putting an offer down on a three-bedroom, single-family home at the end of June.
And it was a shrewd offer since she faced a buyer’s market, like much of British Columbia in June, with rising inventories and declining sales putting home-hunters more in control.
“I felt I had cards in my hand because it was a buyer’s market,” Novosadova said in an interview. “And I felt fairly confident the price could be negotiated down.”
So the single mother wound up getting the house in a “perfect family neighbourhood” for $421,000, not the $429,900 it listed for.
Now she’s excitedly looking forward to moving into the home in September with her 10-year-old daughter. Her realtor Ron Antalek said Novosadova’s experience is typical.
“There’s not the necessity of multiple offers and competing bids,” Antalek said. “People are able to shop. They have time to compare.”
Across B.C. in June, realtors recorded 7,722 sales through the realtor-controlled Multiple Listing Service. That was down 22.5 per cent from the same month in 2009, the period when the biggest markets were just heating up again.
Active listings in inventory climbed almost 21 per cent to hit 59,232 units in June, which equalled a 9.3-month supply based on the pace of sales, said Cameron Muir, the B.C. Real Estate Association’s chief economist.
Muir said the key influences in June were simply an extension of the ones that have dampened demand since they took hold in April: tougher qualifying rules for some mortgages, particularly for first-time buyers and those seeking secondary suites, and a shift in long-term mortgage rates.
Plus, Muir added, the hot buying activity at the end of 2009 lured in many buyers who might have waited until now to purchase, which further reduces demand.
“I don’t know if there’s anything surprising about it, but we’ve seen a transition, in Vancouver in particular, from a seller’s market at the start of the year to a buyer’s market in the summer,” Muir said.
The experience, however, differs depending on which region homebuyers are looking in.
Victoria saw the biggest decline in June sales, down almost 36 per cent from June 2009, but it was closely followed by Metro Vancouver, where sales were down almost 30 per cent, and the region around Kelowna and Vernon, where sales were down almost 27 per cent.
As for whether B.C.’s markets are simply shifting balance or heading into a deeper correction, Muir believes buying activity is likely to increase again in the fall, but not enough to put dramatic pressure on prices.
The average B.C. home price, across all home types, hit $499,908 in June, up 8.2 per cent from the same month a year ago, but slightly off the average of $504,281 over the first six months of 2010.
Muir said home inventory levels sit at the highest they’ve been since March 2009. He said they are “at or near the peak as to where they’re going to go.”
Cameron McNeill, a new-project marketer with MAC Marketing Solutions, said that while sales have slowed, the decline is nothing like the collapse of sales that was experienced in late 2008 and early 2009.
“We’ve got 15, 17 projects open [for sales] and we’re doing deals on all of them,” Mc-Neill said.
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