B.C. real estate a buyer’s market, as sales fall in June

VANCOUVER — When Maple Ridge’s Monika Novosadova went house hunting this spring, she faced an embarrassment of options looking at 28 homes before coming putting an offer down on a three-bedroom single family home at the end of June.

And it was a shrewd offer since, like much of British Columbia in June, she faced a buyer’s market 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 with her 10-year-old daughter in September, and her realtor Ron Antalek said Novosadova’s experience is typical of what other buyers are facing.

“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 which was, down 22.5 per cent from the same month in 2009, the period when biggest markets were just heating back up.

Active listings in inventory, in the meantime, 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, Cameron Muir, the association’s chief economist said.

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 homebuyer’s 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 any 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 about 9.3 months of supply based on the current pace of sales, which is the highest they’ve been since March of 2009, but he believes they are “at or near the peak as to where they’re going to go.”

Cameron McNeill, a new-project marketer with MAC Marketing Systems, 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,” McNeill said.

Source: The Vancouver Sun