I just received the Landcor Data Corporation's quarterly synopsis of the BC Real Estate market and here is what they have to say:
Residential sales have mixed results, again
As many would expect, the first quarter of 2008 (Q108) has seen residential property sales in British Columbia drop in number of sales but increase in total sales value, much like the first quarter of 2007 (Q107).
This continued market trend is the result of a cooling off period in the BC residential property market.
2008 First Quarter Residential Property Sales Results - Introduction
Three regions up, three regions down
Currently, the market is seeing an increase in inventory, with properties sitting for longer periods of time; but as the analysis in this report will show, three of the six regional markets in BC are seeing values continue to increase despite the decrease in number of properties sold.
Looking at the 2008 first quarter results at a regional level, Greater Vancouver and the Okanagan, followed by the Kootenay region as a distant third, continue to see an increase in the total sales value of residential properties compared to the first quarter of 2007. What is interesting is that in the Vancouver Island, Fraser Valley and BC North/Northwest regions, the total sales value has declined in the first quarter of 2008, compared to Q107. This is the first Q1 sales value decrease for all three regions in the past 4 years (please note, this finding is based on examining Q1 sales statistics from Q1 2004 - Q1 2008 only).
Out-of-province buyers stay home
Residential property purchases have declined in the first quarter of 2008 for many reasons, one of which appears to the decline of interest from buyers from outside of British Columbia, namely those from Alberta and the United States. The number of buyers from Ontario is comparable to levels seen in the first quarter of 2007, however these purchases account for nearly half of the total value attributed to Ontario buyers in Q107.
The suspected downtown has arrived, but there is no need for alarm After years of historical highs, the market is simply correcting. In 2001, there were 90,704 residential sales, totalling just under $19 billion. Last year the market dipped for a second consecutive year to result in approx. 158,000 sales, but broke another record with a total value of approx. $62 billion. The first quarter of 2008 saw 26,860 residential properties trade hands, totaling $11.695 billion. On average, first quarter sales account for approx. 19% of annual total sales. Using this as a guideline we can expect to see 2008 total sales of over 140,000 transactions for a total value of over $61 billion. This would lead us to expect 2008 total sales counts to reflect 2004 levels, and a total value of sales similar to 2007.
Here is what I found interesting:
- A continued denial that the BC Real Estate market could be entering a period of substantial price declines.
- No recognition of the amount of speculative activity in the real estate market.
- No recognition of the ridiculous level of income required to purchase a home.
- Out of province buyers accounted for approximately 5.5% of all real estate transactions in Q108 which is down substaintially from the 6.1% in Q107.
Have a read through and tell us what you find interesting. Cheers.