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BCREA Housing Forecast Update - First Quarter 2010

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 6 per cent from 85,028 units in 2009 to 90,100 units this year, before declining 3 per cent to 87,500 units in 2011. Higher home prices and rising mortgage interest rates will provide a constraint on home sales next year.

“BC MLS® residential sales sprinted from an annualized rate of 50,000 units during the first quarter to 112,000 units during the fourth quarter last year,” said Cameron Muir, BCREA Chief Economist. “That gold medal finish will give way to a silver medal performance in 2010.”   

Relatively slow economic growth, waning pent-up demand and rising carrying costs are expected to keep home sales from continuing at their frenetic pace.

While home sales in Victoria, Vancouver and the Fraser Valley rebounded sharply last year and weighted heavily in the provincial total, the rest of the province is demonstrating more gradual improvement.

Vancouver, BC – January 12, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 132 per cent to 5,703 units in December compared to the same month last year. More homes were sold last month than in any December on record except 1989 when 6,014 units were sold.  

“2009 came in like a lamb and went out like a lion,” said Cameron Muir, BCREA Chief Economist. “The year began with home sales trending at a 25-year low and ended at a 20-year high. Low mortgage interest rates, pent-up demand and improving economic conditions were key drivers of consumer demand."

A total of 85,028 residential units were sold through the MLS® in 2009, up 23 per cent from 68,923 units in 2008. The residential sales dollar volume increased 26 per cent to $39.6 billion last year, while the average MLS® residential price increased 2 per cent to $465,725.

"Considerable momentum in the housing market is expected to carry through the first quarter of 2010, before home sales begin to moderate as a result of eroding affordability and less pent-up demand,” added Muir.