Home prices will ease

I think what’s happening now is that there are still buyers out there, but they’re being a little more cautious, a little more price sensitive.....says Tom Gradecak, realtor.

Expect a slowing of property sales the rest of this year due to growing inventory, which has knocked down some of the price gains sellers experienced in the first part of 2010, realtor Royal LePage says.

Royal LePage, in its secondquarter forecast, said sales in Metro Vancouver were “ frontloaded” into the first half of 2010, driving prices to new highs. However, a rise in inventory, should “ temper” prices for the balance of the year, said Bill Binnie, owner of Royal LePage North Shore.

“ I don’t know how much of the gains are going to be taken away, if any,” Binnie said. “ But [ inventory] levels are certainly dampering and turning it back into a balanced market, or maybe even a little bit in favour of the buyer.”

In its forecast, Royal LePage noted that Metro Vancouver had seen steep year-over-year increases in most property types in the second quarter, from 9.5 per cent on average West Vancouver condominiums to 24 per cent on Vancouver east-side detached homes.

Royal LePage estimated the region’s average price across all property types will slip to $ 650,000 by the end of 2010 from $ 669,000 in the second quarter of the year. That, however, will still be almost 10 per cent higher than prices at the end of 2009.

Wednesday’s report was an update of the company’s firstquarter report, which predicted the greater-than-20-per-cent increases in pricing that Metro Vancouver was experiencing would be unsustainable.

In the report, Royal LePage CEO Phil Soper said the Canadian market overall has experienced an unusual pattern, with a frenzy of activity over the fall of 2009 instead of the spring. By contrast, 2010 is following “ a more typical seasonal pattern” in which sales and prices peak in the second quarter.

“ An expected increase in the supply of homes on the market will now bring stabilization in prices and in some cities we will see both prices and unit sales decline towards the end of the year,” Soper said.

Binnie said there is definitely much less competition for listings and less urgency among buyers.

That picture is evident in the recent sales figures reported by the Real Estate Board of Greater Vancouver. June sales for the area covered by the board — most of Metro Vancouver — were down 30 per cent from the same month a year ago, the second month in a row that sales were off from 2009, the rebound year for Metro Vancouver’s real estate sales.

The Greater Vancouver report showed prices in several categories had dipped from recent highs. The benchmark price, an average for typical homes sold, showed one of the bigger declines in June, slipping 5.4 per cent from its May high to $ 1.58 million. The decline in the benchmark for Vancouver east-side detached homes was not far behind at 5.3 per cent from its April high, taking the price to $ 888,127.

Tom Gradecak, with Westside Tom Gradecak Realty, said the harmonized sales tax had an influence on prices for older homes on the west side that are typically torn down for redevelopment: Builders are not buying them.

However, Gradecak said he has sold four homes in the last week, including an $ 8.6-million house on Point Grey Road that went unsold when listed a couple of years ago.

“ I think what’s happening now is that there are still buyers out there, but they’re being a little more cautious, a little more price sensitive,” he said. “ And there’s more product [ for them to choose from].”

("Metro home prices will ease, but still beat 2009: report" prepared by Derrick Penner/Vancouver Sun)