It will likely take several months for B.C.’s residential housing market to return to what is considered “normal levels” after falling significantly during the past few months.
Cameron Muir, chief economist for the BC Real Estate Association (BCREA), said in an interview, “My expectation is home sales will rise in the fall and winter months, on a seasonally adjusted basis, but it will take several months before we see home sales at levels we consider normal for this region.”
BCREA data released Tuesday found that the number of housing unit sales in B.C. fell again in August, to 5,590 units, which is 34.7% below the number of units sold in August 2009, and 3.3% below the 5,784 units sold in July.
Muir said the market is still adjusting to an imbalance in the market during the past year with record low mortgage rates enticing potential buyers to purchase a home before short-term rates started going up, as they have been over the past few months.
The inventory of homes for sale peaked in May and has steadily declined. He suggests a 30% drop off in the number of new listings since April might signal the end to a buyer’s market as home owners thinking of selling remain on the sidelines until the market shows sign of stabilizing.
However, a steady decline in longer-term mortgage rates and fixed mortgage rates continues to spur the market.
“We’ve seen fixed mortgage rates go down as investors flood the bond market because of uncertainty around the sovereign debt issue in Europe and uncertainty over the U.S. economy. Mortgage rates today are almost as low as they were at the height of the recession, and that’s been an incentive for buyers to get into the marketplace.”