Vancouver Fall Housing Market Propped Up by High Demand
To the surprise of most experts, the British Columbia real estate market has been performing exceptionally well through the end of summer and into early fall. Sales figures, demand for housing, and average prices have rebounded from the recession much more quickly than expected but analysts are predicting another slow down before the end of the year.
With the local economy somewhat slow to recover, there has been a disparity between real estate and other markets. The B.C. Real Estate Association recently released a report showing a 68% increase in September sales when compared to a year ago. These 8,576 sales constitute the busiest September since 2005 which makes September 2009 the third busiest recorded. In fact, comparing sales from the first three quarters of 2009 to those of 2008 reveal a 6.3 per cent improvement this year with 63,521 MLS sales. While some argue that we have enough momentum to carry the market for several months most agree that sales in early 2010 will reflect current economic conditions more accurately. With wage growth, job growth, and other economic fundamentals lagging it is unlikely that the real estate market can continue on its steep upward trend.
For the most part, the rush in B.C. home sales seen over the first 9 months of this year have been the result of high activity in coastal markets. Metro Vancouver is the province's biggest and busiest market and when the market crashed last winter many potential buyers decided to take a wait-and-see approach. With current low mortgage rates and stabilized pricing, many of these buyers felt now was the best time to get back into the market. Indeed, some monthly mortgage payments would have fallen by more than a quarter making buying a new home considerably more affordable. Unfortunately, with these low rates, buyer demand has increased and driven the market out of danger meaning that housing prices have begun to increase again. As prices come up they have the opposite effect on affordability and the mortgage rate savings benefitting buyers is being eroded by these higher prices.
With the local economy somewhat slow to recover, there has been a disparity between real estate and other markets. The B.C. Real Estate Association recently released a report showing a 68% increase in September sales when compared to a year ago. These 8,576 sales constitute the busiest September since 2005 which makes September 2009 the third busiest recorded. In fact, comparing sales from the first three quarters of 2009 to those of 2008 reveal a 6.3 per cent improvement this year with 63,521 MLS sales. While some argue that we have enough momentum to carry the market for several months most agree that sales in early 2010 will reflect current economic conditions more accurately. With wage growth, job growth, and other economic fundamentals lagging it is unlikely that the real estate market can continue on its steep upward trend.
For the most part, the rush in B.C. home sales seen over the first 9 months of this year have been the result of high activity in coastal markets. Metro Vancouver is the province's biggest and busiest market and when the market crashed last winter many potential buyers decided to take a wait-and-see approach. With current low mortgage rates and stabilized pricing, many of these buyers felt now was the best time to get back into the market. Indeed, some monthly mortgage payments would have fallen by more than a quarter making buying a new home considerably more affordable. Unfortunately, with these low rates, buyer demand has increased and driven the market out of danger meaning that housing prices have begun to increase again. As prices come up they have the opposite effect on affordability and the mortgage rate savings benefitting buyers is being eroded by these higher prices.
posted by VancouverResidence
