Rockies West Realty, Invermere BC Real Estate : Forecast, BC real estate market

BC 2012 Second Quarter Housing Forecast

Rockies West Realty — Wed, 06 Jun 2012 15:40:00 GMT

Home buying activity in the province is expected to remain at a moderate pace through 2013 as headwinds in the global economy limit economic expansion here at home. Residential sales through the Multiple Listing Service® (MLS®) in British Columbia are forecast to edge back 2.2 per cent to 75,200 units this year, before rising 4.9 per cent to 78,900 units in 2013. Since 2009, BC home sales have hovered in the 74,000 to 78,000 unit range. A record 106,310 units traded hands in 2005.

Regionally, Lower Mainland markets are expected to experience fewer sales this year than last as an exceedingly strong first quarter of 2011 didn’t repeat itself in 2012. However, Interior markets are expected to post much stronger results, with Kamloops, the Okanagan and the North posting the strongest year-over-year increases.

Despite historically low mortgage interest rates, relatively weak employment growth in 2011 is curbing overall housing demand this year. However, both employment and consumer spending has posted more positive growth during the first four months of the year. As a result, housing demand is expected to show some improvement in the latter half of the year and into 2013.

Read the complete forecast (pdf)

Less Volatility in the Housing Market

Rockies West Realty — Thu, 23 Feb 2012 18:39:00 GMT

The BC economy continues to face headwinds this year. The Euro-zone debt crisis, a lacklustre US economy and growing pains in China are significant impediments to growth. Modest economic growth will be accompanied by a similarly tepid employment growth rate of 1.6 per cent. This trajectory will only put a dent in the unemployment rate, which is expected to average 7.4 per cent in 2012. However, a welcome shift from part time to full time employment is expected. Consumers, themselves laden with debt, will keep tighter reins on their spending, contributing to below average retail sales growth.

One bright light has been expanding trade to Asia. While the share of BC exports shipped to the US has shrunk from 69 per cent of total exports in 2001 to an estimated 43 per cent in 2011, exports destined to China over the same period have skyrocketed from 2.3 per cent to nearly 15 per cent of total exports. In fact, China overtook Japan in 2011 as BC's second largest trading partner. BC now exports about the same in dollar volume to Asia as we do to the US.

Against this backdrop, the housing market is expected to under perform its ten-year sales average again this year, with 80,000 unit sales compared to the ten-year average of 88,000 unit sales.

While this is notably unexciting, the level of consumer demand is nevertheless enviable in many parts of the world. Detroit comes to mind. The key market driver continues to be interest rates. Historically low and accommodative borrowing costs have bolstered household budgets and kept home prices relatively buoyant. The flip-side of the Euro-zone debt crisis is that risk avoiding investors have flocked to North American bond markets, pulling down yields and mortgage interest rates right along with them. The good news is that mortgage rates are unlikely to begin a normalization trend until the end of 2012 at the earliest.

The once divergent regional market conditions are expected to narrow this year. Moderate gains in consumer demand outside of the Lower Mainland will help reduce the available supply of homes on the market. While the recreation market will take a number of years to regain its pre-recession glory, improving economic conditions in Alberta this year are expected to have a positive impact in the Kootenay and Okanagan markets. However, overall supply conditions are expected to be tilted slightly in favour of home buyers. Expect home price to go nowhere fast, even declining a few percentage points in some of the more oversupplied regions.

On the economic front, it may be time to replace your shock absorbers because the bumpy road will continue for another year, whereas, in the housing market, moderate demand is the keyword.,/p>

"Copyright British Columbia Real Estate Association. Reprinted with permission."

Home Unit Sales to Climb Eight Per Cent in 2011

Rockies West Realty — Wed, 23 Feb 2011 20:54:00 GMT

Vancouver, BC - February 23, 2011. The British Columbia Real Estate Association (BCREA) released its Housing Forecast for the first quarter of 2011 today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 8 per cent from 74,640 units in 2010 to 80,900 units this year, and increase another 4 per cent to 83,950 units in 2012.

"British Columbia housing markets are returning to normalcy after two years of volatility," said Cameron Muir, BCREA Chief Economist. "Employment and population growth will fuel consumer demand over the next two years. However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the ten-year average of 87,600 units."

"Total active residential listings in the province declined 14 per cent since last spring. However, the inventory of homes for sale is expected to edge higher as the number of new listings to the market advances during the first two quarters of 2011," added Muir. "Regional market differences continue in the province, with Vancouver trending into a seller's market, while the Okanagan, Kootenay and Kamloops markets trend from a buyer's market toward balanced conditions."

The average MLS® residential price in the Kootenay's is forecast to increase 0.5 per cent to $275,000 this year and a further increase of 1.1 percent in 2012 to $278,000.

Read the complete report (pdf)