North Shore Real Estate Trends and Housing Value Predictions - Metro Vancouver Real Estate Prices Should Moderate through to 2009

House Sales Slow Across North Shore Real Estate

High supply makes for home buyers’ market according to Deneka of the North Shore News. After years of favourable conditions for home sellers, the North Shore real estate market appears to be giving buyers the upper hand, according to a new report issued by the Real Estate Board of Greater Vancouver. Multiple Listing Service figures released by the board last week show that sales for both North Vancouver and West Vancouver real estate housing in June were down from the same time last year, while listings were up. The percentage of sales-to-listings for detached homes in North Vancouver last month was 28 per cent, while in June 2007 that figure stood at 93 per cent. In West Vancouver housing market, the percentage was 29 per cent last month and 64 per cent for the same time last year. For several months now there have been signs of moderation in the British Columbia home market as demand has eased off from the highs of last year, explained Cameron Muir, chief economist with the B.C. Real Estate Association. The North and West Vancouver housing real estate market has been rebalancing itself from the high demand state, and now there is actually higher supply than demand, meaning the property market is now favourable towards homebuyers.

“More balance between demand and supply means less upward pressure on home prices. It also reduces the chance of multiple bids on the same house in North or West Vancouver property, giving homebuyers more time to investigate properties thoroughly before purchasing,” said Muir in a recent press release. “This is probably a long-anticipated, realignment of the market,” he added in an interview. The B.C. Real Estate Association forecasts that residential sales for the Greater Vancouver area will fall by eight per cent his year, from 38,978 unit sales last year to 25,900 for 2008. They anticipate that in 2009 sales will again drop by three per cent for the area to 34,800 sales. Yet despite the fact that salese are dropping, home prices are not, explained David Watt, president of the Greater Vancouver Real Estate Board. According to the Board’s recent report, overall prices in the Greater Vancouver area were up 7.3 per cent in June compared to the same time last year, bringing the average residential property selling price to $564,982 last month.

In North Vancouver real estate housing market, since June 2007, the benchmark price of a detached home increased by 4.7 pe cent to $893,639, the average attached home price increased by 8.1 per cent to $608,225 and the average condo price rose by 4.4 per cent to $386,212. In West Vancouver housing real estate market, over the past year, detached home prices have risen by 0.9 per cent to an average of $1,428,139 while the average attached home price increased by 4.9 per cent to $719,783 and the average condo selling price was up by 6.9 per cent to $711,268. BCREA expects the rpcie increase will continue, but at a slower pace than the double digit increases seen over the past several years. According to their spring 2008 housing forecast, the association predicts that overall MLS selling prices for the Greater Vancouver area will rise by nine per cent this year to an average of $621,000 and will increase by an additional five per cent next year to $651,000. Lower year-over-year increases are a result of the rebalancing of the real estate market, said Muir. With more homes on the market in North and West Vancouver housing market, sellers need to be more educated and need to price their homes at reasonable prices so that their houses will sell. Homes that have been on the market for some time and that have been listed in anticipation of continued rising prices may have to re-evaluate their pricing, he said. “Although housing prices, on a year-over-year comparison, continue to show single-digit percentage increases, we are beginning to see more price reductions in properties listed on the market today,” Watt said in the press release. However, lower listing prices do not mean that home prices are decreasing, he explained in the interview. “It’s not even that prices have gone down, it’s just that they aren’t marked up,” he said.

Here are some updated North Vancouver MIRA resales condos in Lower Lonsdale re-sale real estate market at Mira on the Park townhomes.

With the North Vancouver housing market and West Vancouver real estate taking a downturn south of the border, many Canadians have grown wary that Canada will suffer the same fate as the United States, but comparing the two industries is a far stretch, said Gregory Klump, chief economist with the Canadian Real Estate Association. The U.S. housing market experienced extremely rapid price increases and poor lending practises which has now resulted in price corrections, he said. In Canada, on the other hand, price increases of the magnitude seen down south did not happen and Canadian lending always remained conservative, so a real estate market crash in Canada is not likely, he said. “We don’t see a crash on the horizon, we see it returning to normal levels,” he said. Some areas in Canada, however, have seen falling sales prices, according to a summer 2008 report issued by BMO Capital Markets. In Calgary, prices are down 2.4 per cent since last year and in Edmonton, prices have dropped by 4.8 per cent. Prices are also expected to drop in Saskatchewan, said Michael Gregory, senior economist with BMO Capital Markets. British Columbia, on the other hand, did not see the major price mark-ups seen in Alberta and Saskatchewan, and so B.C. remains in good shape, he said. “the rate of price increases will slow, but it (B.C.) still has a pretty strong economy,” he said, adding that he predicts, “a soft landing, rather than a collapse.” A report issued by Landcor Data Corporation at the end of last month shows that some areas in British Columbia are faring better than others.

In 2001, sales values in the province totaled $19 billion; last year they totaled $62 billion and at the end of this year, the rate is expected to be over $61 billion, explained Rudy Nielsen, president of Landcor Data Corporation. “Things are cooling but things aren’t bad,” he said. “Overall, I look at B.C. as very positive,” he added, explaining that the province has great natural resources, good tourism and a high quality of life. Even in places where prices may decrease, he says homeowners just need to wait it out because prices will again increase. He said he expects the cooling period to only last two or three quarters before turning around next year sometime. As for the North Shore real estate market specifically, Watt said he believes it is secure and, if anything, real estate in North and West Vancouver will become more desirable as gas prices rise and people look at living in areas that are closer to the city core.

House Prices Start To Sag – North Vancouver Realtors Predict “Soft Landing”

An article written by Jeff for Black Press of the North Shore Outlook Newspaper. Real estate prices have begun to slip in some parts of the Lower Mainland. The cooling trend comes as realtors report high numbers of prospective sellers. “Real estate is cyclical and the numbers show that we’ve entered a buyer’s cycle,” said Kelvin Neufeld, president of the Fraser Valley Real Estate Board. Prices are still up by at least single digits year-over-year, but the stats indicate most cities saw prices peak sometime int eh second half of 2007 or early in 2008 and some areas have since been trending lower. In the Fraser Valley, the typical single family house fell by 0.3 per cent in price in the past 3 months, while apartments were up 0.4 per cent and townhouses rose 1.6 per cent. The Greater Vancouver Real Estate Board reported its benchmark house price fell about $6,000 in June to $765,000, but that’s still up seven per cent from a year ago. Condo and townhouse prices are also down marginally in the past month. Detached houses in White Rock, Port Coquitlam and Burnaby fell more than $20,000 in price since April, the stats show. The biggest drop so far has been in West Vancouver, where detached houses fell more than 10 per cent in price in the last two months, from just under $1.6 million to $1.43 million. West Van house prices there are now up only 0.9 per cent year-over-year. “We’re experiencing a soft landing coming off the strongest and longest real estate cycle in our history,” Neufeld said. Sales are down sharply from a year ago across the region. New listings, meanwhile, are up and the number of unsold homes is rising. Realtors say sellers are in some cases having to moderate their expectations of how much they will get for their properties. We are beginning to see more price reductions in properties listed on the market today,” said Greater Vancouver Real Estate Board president David Watt.

Metro Vancouver Housing Market Moderates in 2008 and 2009, says the current release by Canada Mortgage & Housing Corporation.

Strong economic and demographic fundamentals, steady job growth and population growth, along with continuing low mortgage rates – will support demand for new and resale Vancouver housing. However, softening consumer sentiment and high mortgage carrying costs will temper the effects of these positive factors, dampening home buyer demand in Metro Vancouver.

New Vancouver Home Construction and MLS Sales Will Dip Slightly, but say high from a historical perspective for the remainder of the year and through 2009. Vancouver home prices will rise, but at a slower pace than in the past few years, as an increasing supply of both new and existing homes for sale give Vancouver home buyers more choice and more time to make their purchasing decision.

MLS Sales in Metro Vancouver Real Estate Will Come Down off the Near-Record High Reached in 2007, but stay well above the ten year average of 31,000. Strong Vancouver home buyer demand, fuelled by job growth, and a steady flow of people moving to the region will keep sales brisk. However, waning consumer confidence and high mortgage carrying costs will constrain Vancouver home sales. MLS sales will dip eight per cent to 36,000 units in 2008, and a further three per cent in 2009 as mortgage rates start to creep up. The main factors tempering Vancouver home buyer demand will be high home prices and softening consumer sentiment. With the average resale home price in Metro Vancouver at more than $600,000 and still rising, some potential homebuyers will opt to delay their purchase. Some low equity and first time home buyers could find it difficult to negotiate a mortgage with achievable monthly carrying costs, in spit of low mortgage rates. At present active listings sold is around 25%, which is the amount that divides a Vancouver sellers market to a balanced market.

The Supply of Vancouver Resale Homes on the real estate market will grow as homeowners look to capitalize on the home equity build up resulting from four straight years of double digit home price increases. The decision to sell may take an added urgency in light of the Vancouver housing marketing downturn int eh US. In the first quarter of 2008, the average number of active MLS listings for sale in Metro Vancouver increased nine per cent p=compared to the same period last year; with the supply condominiums for sale increasing more than other home types. At the end of the first quarter there was a five month supply of Vancouver homes on the real estate market, up from four months. Over the last 10 years, the highest supply was in 1995 when it was at 12 months.

Home Building Will Be Robust: new home construction in the Vancouver real estate area will be near historic highs this year and next, but will dip slightly compared to last year’s swift pace. Some moderation in new Vancouver home building will be due to an easing in demand for new pre-construction homes as homebuyers are able to meet their housing needs int eh better supplied resale market. Secondly, tightening credit conditions for Vancouver real estate developers may make it more difficult to secure financing for new multi-family projects. Home starts will decline 8% this year, and a further 3% next. Two thirds of homes built last year were condo projects.

Condominiums And Rental Outlook Positive – Vancouver Resale Condo Market – existing Vancouver condo sales will moderate slightly, but stay high for the remainder of 2008 and through 2009. Demand for condominiums will be sustained by the strong fundamentals mentioned above and will also be bolstered by continuing low mortgage rates and the lower price of condo homes, compared to detached. The average MLS price of a condo in Metro Vancouver is now more than $400,000 below the average price of a house.

Expect the Supply of Condo Listings To Trend Up over the next 18 months as demand moderates. In the first quarter of 2008, the average number of active MLS condo listings in Vancouver for sale increased 16% compared to the same period last year. By end of first quarter, the supply of condos on the Vancouver real estate market increased to a 4 month supply, up from 3 months a year earlier. This signals demand and supply moving towards equilibrium.

New and Existing Condo Prices in Vancouver Will Continue to Rise, but at a slower pace in the past few years. Price growth will slow into the single digit range this year with 8% appreciation this year and 5% next.

New Vancouver Condo Construction absorptions of new condos have been closely tracking completions for the past year, with virtually all (98%) units absorbed upon completion. An estimated one half of units underway are pre-sold and the supply of completed, unsold new Vancouver units is growing slowly but remains at less than one third of the 10 year average level. Unsold supply is located mainly in Maple Ridge/Pitt Meadows and Surrey. Vancouver has very few unsold units.

High starts and longer completion times have pushed the number of condos under construction to record highs, with over 20,000 units underway at he end of March 2008. At the current absorption rate of 600 condos per month, there is a 33 month supply of units coming on stream over the next 2-3 years. When Vancouver pre-sales condos is taken into account the number of months supply is halved to 16 months. The supply of unsold new condo Vancouver units will edge up as condo demand moderates from the buying frenzy of the past few years and as more resale condo listings become available through the remainder of 2008 and in 2009.

Speculative and Investor Activity speculation in Vancouver’s condo markets has been trending down over the past year and will continue to edge down as the pace of price growth slows this year and next. In 2007 almost one quarter of condo units in the Metro Vancouver were owned by real estate investors, a marginal dip from 5 years ago. Investor presence is higher in the downtown core, where 45% of condos are investor owned. The more expensive areas of downtown (Coal Harbour and False Creek North) have a slightly lower proportion of Vancouver investor units compared with less expensive areas.

Vancouver Economy will support housing demand solid local economic conditions in Metro Vancouver will support demand for housing this year and next. Economic growth of 3% or better is forecast for the region through 2009 with residential and non residential construction, as well as wholesale and retail trade growth. Vancouver home building will stay at high levels with non-residential construction, including Olympic related projects and non related projects, such as the Vancouver Convention Centre, ongoing work on the Vancouver International Airport and building renovations at UBC, will keep Vancouver’s builders busy.

Consumer spending, the largest component of domestic demand, will be spurred on by a growing population job and income growth. The unemployment rate is at 20 year low of 4% with 36,000 jobs added in the Metro Vancouver region last year. Strong job growth will continue and will support demand for homeownership and rental housing.

Vancouver’s healthy job market and growing international reputation as a clean, liveable city will draw people to the region from other provinces and from abroad. Greater Vancouver will gain more than 30,000 people through migration in each of the coming years. International migrants will account for most of this Vancouver growth, but the Vancouver region will continue to attract people from other provinces who are looking for jobs. This will sustain housing demand.

On the downside, one of the main factors limiting homebuyer Vancouver demand will be softening consumer sentiment. Consumer confidence is based on the US economic and housing slowdown, the sub-prime crises in the US and the economic slowdown in central Canada as well, the high Canadian dollar and low lumber prices in BC. While Metro Vancouver economy is diverse and somewhat insulated from these economic developments, downside risks to the economic outlook remain.

Mortgage rates will remain relatively flat.