Real estate hot but not yet over heating

Metro Vancouver's real-estate market warmed up considerably at the end of 2009, but probably won't overheat as 2010 progresses, new data released Friday by the Conference Board of Canada suggests.

While Metro Vancouver home sales in December set a pace that was nearly three times higher than sales last January, board senior economist Robin Wiebe said, new listings also rose, keeping the overall market in balance.

"Though [the market] is closing on the top of the balanced range, buyers are provided with a reasonable choice as they go out searching for homes," Wiebe said in an interview.

However, Wiebe added, "It wouldn't take much to tip [the market] over into sellers' territory."

That has the Conference Board putting Metro Vancouver on the list of places it expects will see property prices rise by between five and almost seven per cent, along with Victoria, the Fraser Valley, Calgary, Regina, Ottawa and Halifax.

Edmonton, Saskatoon and Montreal are among the cities the board expects will see price increases of more than seven per cent, with Winnipeg, Toronto and Hamilton among those that should see price increases between three and five per cent.

The Conference Board is estimating that no Canadian cities will see price decreases in 2010.

Wiebe said the estimates are not based on a full economic forecast, but do reflect the recent strength of sales and prices in Metro Vancouver compared with longer-term averages for sales and price performance.

"We've seen average prices [in December] up 11.9 per cent from a year ago [to $655,234], [and] the pace of price increases is accelerating a little bit."

The Conference Board's examination took December's home-sales figures and estimated that if sales continued at the same pace, Metro Vancouver would see 50,016 homes sold over 12 months, compared with a projected 12-month pace of just 18,138 based on December 2008 results.

However, calculating the same figure for December's new listings shows that Metro sellers were on pace to list 73,938 homes for sale over 12 months, compared with a pace of 54,306 new listings based on December 2008 results.

The resulting ratio of sales to new listings of .72, or 72 per cent, Wiebe said, places Metro Vancouver near the top of the range in which the Conference Board considers a market balanced between buyers and sellers.

("Metro Vancouver real estate hot, but not yet overheating: Conference Board of Canada" prepared by Derrick Penner/Vancouver Sun)