Expectations for real estate price drops in BC

A recent surge in real estate sales has caused the Canadian Real Estate Association to sharply revise its expectations for price drops in British Columbia.

CREA, in its forecast released Thursday, estimated that B.C.'s average price will drop less than seven per cent over 2009, more than three percentage points off the 10.6-per-cent drop forecast in February.

CREA forecast that B.C.'s average price will drop to $423,300, instead of the $406,300 average it forecast earlier.

For 2010, CREA is now predicting that B.C. prices will start edging up again by almost two per cent compared with a 2010 drop of 0.6 per cent written into the February forecast.

"Monthly resale housing activity improved as the first quarter progressed," Gregory Klump, CREA's chief economist, said in a news release, "entering the second quarter on a rising trend [that is] closing in on levels last seen before [the sales trend] fell sharply late last year."

B.C. sales rose in April from the previous month, the B.C. Real Estate Association said Thursday in a news release, as buyers were drawn back into the market by lower prices and rock-bottom mortgage rates. And the inventory of unsold homes across the province dropped to the lowest level in 12 months, the association said, edging the ratio of sales to active listings close to the zone housing economists consider balanced between buyers and sellers.

"An increase in consumer demand combined with fewer homes for sale has trended the market near balanced conditions," Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.

Realtors counted 6,918 sales through the Multiple Listing Service in April, down 20 per cent from the same month a year ago. April was the third straight month that sales were higher than the previous month. However, to the end of the first four months, sales were still lower than a year ago with realtors counting 18,089 sales, a 35-per-cent reduction over the first four months of 2008.

The average house price across B.C. was $433,246 over the first four months, down almost nine per cent from a year ag

("Home prices will drop less than expected, real estate group says" prepared by Derrick Penner/Vancouver Sun)