Metro Vancouver’s real estate market lists as demand drops

Chief economist for the British Columbia Real Estate Association said rising interest rates will crimp the ability of new buyers to get into the market.

METRO VANCOUVER – April was a continuation of the trend that has seen sales ease off in Lower Mainland real estate markets and listings rise, which has taken a lot of the pressure off property prices, one economist said Tuesday.

Both the Real Estate Board of Greater Vancouver and Fraser Valley Real Estate Board released April sales figures Tuesday showing a less frenzied pace of activity and higher levels of inventory.

“What I’ve been watching is a market that has returned to where you would think the market should stand just now coming out of a recession,” Cameron Muir, chief economist for the British Columbia Real Estate Association.

Muir said those people looking to buy homes as B.C. came out of the recession have largely made their purchases. From here on in, he expects that rising interest rates will crimp the ability of new buyers to get into the market.

The net result, he added, is that prices “will likely face little upward pressure for the balance of the year.”

In Metro Vancouver, the greater Vancouver board 3,512 home sales through the Multiple Listing Service in April, 18-per-cent above the same month a year ago.

At the same time, sellers, poured 7,648 new listings onto the market, almost 65 per cent more than were put on the market in the same month a year ago. That brought the region’s total inventory to 15,901 units, up 17 per cent from March and 11 per cent from the same month a year ago.

The region’s benchmark price for a detached home, an average price for typical homes sold, hit $818,403 in April, up 21 per cent from the same month a year ago, and up 2.2 per cent from March.

In the Fraser Valley, realtors saw 1,793 sales through the Multiple Listing Service, some 39 per cent higher than April of 2009.

However, the region saw its inventories rise to near-record levels with the addition of 3,760 new listings, bringing a total inventory of 10,635 units.

The Valley’s benchmark price, the average for typical detached home sold, hit $520,423 in April up 13 per cent compared with $460,299 a year ago. Compared with March, that price represented a 1.1-per-cent increase.

However, a few price points in both board areas eased off of their March highs.

In the Fraser Valley, for instance, the benchmark detached-home price in Langley dropped three per cent from March to $523,065. And the benchmark Abbotsford condominium price slipped 1.3 per cent from March to $324,480.

Deanna Horn, president of the Fraser Valley board, said the statistics seem to indicated that demand is declining most among higher-priced properties, with strong interest still being shown in the “typical” benchmark-range.

“You’ll see incremental price increases and decreases depending on the area and the property type,” Horn said, but on balance the market is “quite stable.”

In Metro Vancouver, the benchmark price for a Burnaby detached home slipped 1.5 per cent to $791,994 compared with March. The benchmark North Vancouver apartment price was down 4.4 per cent from March at $390,383.

However, Muir said not a lot can be read into one month worth of results.

“If listing inventories climb dramatically and sales drop off current levels, of course there is potential for home prices to edge lower,” he said. “But at this point it’s too early to make that kind of call.”

Source: The Vancouver Sun