2008 in Review
2008 was the year that the entire world woke up to the fact that houses don't go up in value forever and the entire mess of a year that 2008 was can be summarized in that fact. Stock, bond, and commodity markets all reacted to the spectre of a long and protracted recession with no quick turnaround in sight. It is truly amazing to see how consumption and borrowing against the value of a home had an impact at inflating the US and Canadian economies.
Locally, house prices fell dramatically starting in May and benchmark prices are now down nearly 14% in the REBGV area and just over 9% in the FVREB area. The pundits are still calling for a spring turnaround and many real estate agents will likely be disappointed with their incomes during 2009. They had better learn how to get sellers to drop the price fast or no paycheques will be forthcoming in 2009. I fully expect that many real estate agents and mortgage brokers will try to find other work during 2009.
I was 2 for 3 on my predictions for 2008 but I missed a big one as I didn't see how bad the stock, bond, and commodity markets would turn out.
Predictions make fools of us all unless we are lucky enough to guess correctly. Sometimes an educated guess is better than nothing however and it is kind of fun to toss around what we think is coming during the next year.
Here are my thoughts:
1) Real estate prices in the Metro Vancouver area will fall by 20% or more during 2009 from current levels. The fall in prices will be worst for apartments and will be best for moderately priced suburban detached homes.
2) BC will enter recession sometime in 2009. Canada and the US will continue in their recessions throughout most, if not all of 2009.
3) The Vancouver construction industry will be decimated during 2009 with many more projects hitting the completion phase and the need for labour dries up. See historical employement statistics here. The Metro Vancouver area will probably see a loss of 50,000+ jobs in 2009 from the construction, retail, finance, and real estate professions.