B.C.’s real estate market may be in a cooling trend, but Central 1 Credit Union is predicting home sales will stabilize later this year and trend upward in 2011 and 2012.
According to a Central 1 report released Thursday, residential transactions are expected to drop 7% from 2009 levels for the remainder of 2010 before rising 5% in 2011 and then 9% in 2012.
“Most of the year we’ve seen this downtrend in sales activity and it’s been a rather dramatic decline, and as we move toward the end of the year we’re seeing a stabilization in figures and we’re going to hit a bottoming [out] in sales figures later this year,” said Bryan Yu, an economist with Central 1.
Although a weak sales environment and higher inventory levels have placed downward pressure on prices in 2010, lower prices and attractive mortgage rates into 2011 could be a powerful incentive to attract more buyers to the market next year, he said.
The report forecasts the median annual home price in B.C. to reach $388,000 this year, a 5% increase from 2009. That price is expected to drop 5% next year before it rebounding 3% in 2012.
Still, more buyers do not mean a dramatic increase in sales.
Said Yu: “The market will remain relatively weak in terms of overall sales.”