Comment on BCREA Report – Home Sales Increase In February
The BC Real Estate Association (BCREA) reported on March 13, 2009 that after several months of decrease, that there were more Home Sales last month, than the month prior. Greater Vancouver has experienced a 13% average decrease in prices. The residential sales units fell 45.3% for this Feburary over last Feburary. The report shows a graph which is shows quite well what is going on.
We have heard so many reports about how this month is 50% less than same month, year over year. I think that the reporting of month to month is more relevant than year over year right now because we are not in normal times. Seasonal changes still occur, so it is useful to look at year over year, but in this climate; where we see constant decline, its is nice to see a positive statistic that indicates we may be nearing a bottom.
One item not addressed in the BCREA report, that I believe is relevant; is that a lot Feburary transactions were completions on newly build condos. Some of the contracts for these properties were recently written such as the Onni and H&H Blow-outs, but several of these contracts were written over the past few years with current completions. I believe this does somewhat skew the numbers in that it does not reflect people choosing to enter the current market, they have made this choice months and years ago.
As long as there are both Buyers and Sellers in the market, prices may go up or down, but at least there should be enough particpants to allow market forces to work. What we saw in the fall of last year was a real imbalance with a flood of sellers and hardly any buyers. Some sellers have taken their properties off the market and there are some new buyers in the market as the cost of ownership continues to decrease with interest rate cuts.
In my office, I noticed things start to get busier around the beginning of Feburary. I think we will have a strong spring with lots of continued activity in the entry level markets.