The total value of homes sold in B.C. dropped by nearly one-quarter in November, with declines in Vancouver and the Fraser Valley leading the slide.

The dollar volume of homes sold through the Multiple Listing Service in B.C. declined 24.6 per cent to $2.3 billion in November compared to the same month last year, the B.C. Real Estate Association reported Thursday.

Cameron Muir, BCREA’s chief economist, said that tighter mortgage rules introduced this summer had squeezed some buyers out of the market, but he expects sales to go up in 2013.

“When I suggest that we’re going to see an increase in sales levels next year, it doesn’t mean we’re going to return to the heady days before the recession. But the longer we see sales levels fall below the long-term average, the more likely we’re going to see pent-up demand (grow) in the marketplace, which may contribute to increased sales activity in 2013,” Muir said.

The number of units sold this November was down 17 per cent in the province from November 2011 to 4,680, while the average price was down 9.1 per cent to $480,891.

In 2011, there were large numbers of single family luxury homes sold, which elevated the average, Muir said. This year, a more typical mix of homes is being sold, so the average is lower. But prices are also coming down.

“There has been some modest downward pressure on prices in Vancouver, particularly in the single detached market on the west side, for example,” Muir said. “For the first six months of this year, the west side of Vancouver is down 9.7 per cent on the home price index. West Vancouver is down nine per cent and Richmond is down 6.2 per cent.

“We’ve seen those markets floating a little bit back down to Earth, and they’re having an impact on the aggregate numbers for the region.”

In Metro Vancouver, the dollar volume of sales fell 32 per cent from $1.74 billion to $1.18 billion, while in the Fraser Valley total sales fell 25 per cent from $498 million to $371 million.

“More promising numbers are coming from … the area around Kelowna — they’re up 13 per cent in unit sales,” Muir said. “And B.C. Northern has been incredibly stable in this post-recession period. That’s likely the result of much more diversification of the economy in Prince George, for example, and relatively buoyant demand for commodities. Unemployment did not skyrocket there in the recession — it’s very resilient in B.C. Northern this time around.”

While sales in the Okanagan are up for the year so far, Muir said that region has not seen the same rebound Vancouver prices did from the recession.

“Prices in that region have come off in the past three years, but not as much as people might have expected them to, given that inventory levels have been extremely high relative to sales for about three years now,” Muir said.

For the year to date, across B.C. sales dollar volume was down 18.7 per cent, while the number of units sold was down 11 per cent, and the average price dropped 8.6 per cent to $515, 611.

Source: Tracy Sherlock, Vancouver Sun

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