House prices drop

Detached homes and apartment prices in most Metro Vancouver municipalities have dipped below 2007 levels as inventories rise and sales fall.

The benchmark price for a detached home in Metro Vancouver in September was $726,331, a 1.6-per-cent drop from September last year and 5.8-per-cent drop since May. Prices for apartments dipped by 0.7 per cent to $369,062 compared to September last year.

Richmond and Port Coquitlam, where detached home prices rose 3.9 per cent and 2.6 per cent respectively, were exceptions.

"After five years of unprecedented increases, housing prices are beginning to realign," Dave Watt, president of the Real Estate Board of Greater Vancouver, said in a release.

In Metro Vancouver, residential sales dropped almost 43 per cent last month to 1,585 compared to 2,776 in September last year. Listings increased almost 29 per cent to more than 6,100.

In the Fraser Valley, 980 homes switched hands in September, down 26 per cent compared to 1,332 sales in September last year, said the

Fraser Valley Real Estate Board. Listings jumped 56 per cent, to hit a record high of 12,379.

"If you're looking to buy, you're not having to rush to buy," said Tsur Sommerville, director of the Centre for Urban Economics and Real Estate at UBC's Sauder School of Business. "It's creating an environment of downward pressure because you've got a lot of product looking for buyers."

B.C. Real Estate Association chief economist Cameron Muir said buyers are taking a wait-and-see approach.

He said he does not foresee a U.S.-style meltdown in B.C.

"We don't have the subprime mortgage crisis they have there," said Muir.

"There is no spike in mortgage rates on the horizon or sharp increases expected in interest rates."

In fact, conditions might be ripe for a reversal.

Muir believes listings will decline as sellers become wary of lower sale prices and the longer time required to sell in a slow market.

"It's going to have the effect of home sellers pulling their homes off the market and taking a wait-and-see approach themselves."

(prepared by Cheryl Chan/Vancouver Province)