Real estate market: Parade of New Homes

The Greater Vancouver Home Builders' Association isn't going to let a real estate market slowdown rain on its parade. Whatever the weather, the 7th annual spring Parade of New Homes starts today and runs to April 26, offering potential buyers and the curious an opportunity to check out the work of 13 builders at 24 projects in Coquitlam, Delta, Langley, Maple Ridge, North Vancouver and Surrey.

It may seem an inauspicious time to showcase homes for sale. After all, sales have been soft, prices are down and housing starts were 70 per cent lower in the first quarter than they were in the same three months of 2008.

The weak housing market is set against a flood of dismal economic news, including rising unemployment, increasing investment losses and ebbing consumer confidence. In its quarterly house-price survey, realty firm Royal LePage estimated house prices have dropped by 12 per cent over the past three months compared with the same period last year.

But this cloud of gloom has a silver lining.

For a start, the drop in housing starts can be seen as a positive sign that builders caught the decline in the resale home market early and responded logically. They are building fewer houses to allow the market to adjust to the inventory of unsold homes. Housing starts will recover when market balance is restored.

Furthermore, lower real estate prices might be bad news for sellers, but it's a break for buyers, who have been waiting for housing to reach more affordable levels.

Not only are house prices more affordable, but financing costs have never been lower. Mortgage rates are at historic lows, with variable-rate mortgages available at little more than the rate of inflation. On average, monthly payments are 26 per cent less than they were two years ago.

Mortgage terms are also more flexible, so buyers can negotiate the amount of the down payment, frequency of payments, amortization and other conditions to meet their needs.

Surveys show that a majority of British Columbians believe it is a buyer's market, a perception that was confirmed by attendance at the home builders' recent seminar for first time buyers. The event drew 900 participants, 75 per cent of whom indicated their intention to buy a home within 12 months.

What's more, February home sales were up sharply from January. Granted, January recorded a 25-year low for housing sales and an uptick could have been expected, but there is hope that it signalled the end of the decline and that recovery is underway.

The economic slowdown has brought about another nugget of good news -- lower building costs. Builders have been able to add more luxury to new homes at less cost because labour, land and some materials are less expensive than they were a year or two ago.

The condos, townhouses and single-family detached homes on display range in price from just over $200,000 for a flat in Surrey to $869,000 for an executive home on a 28,000-square-foot lot in Coquitlam.

The parade will go on come rain or shine from 1 to 5 p.m. Monday to Friday and noon to 5 p.m. Saturday and Sunday.

("Real estate market's cloud of gloom gets a bit of a silver lining" Source: Editorial/Vancouver Sun)