Due to falling consumer confidence, housing sales in British Columbia are in for a sharp decline this year, that will be followed by a modest recovery in 2009.
The prediction is contained in a 2008 fall housing forecast released Wednesday by the British Columbia Real Estate Association (BCREA).
It said BC Multiple Listing Service (MLS) residential sales are forecast to decline 28 per cent to 73,700 units this year from 102,805 units in 2007.
"The erosion of consumer confidence that began with rising fuel prices earlier in the year is continuing, as the global financial crisis and volatile equity markets have BC households concerned about their own finances," said Cameron Muir, Chief Economist.
The average MLS residential price is expected to increase by three per cent to $453,000 this year.
But BCREA says home prices peaked in the first quarter of 2008 and have been edging lower for several months.
In 2009, the average price is forecast to fall nine per cent to $413,000, with most of the decrease having already occurred by the end this year.
Downward pressure on home prices is expected to ease by the second quarter of 2009, as an increase in affordability and consumer confidence induces a modest growth in sales.
The inventory of homes for sale is also expected to decline in the coming months as potential home sellers delay putting their homes on the market until conditions improve.
BCREA represents 12 member real estate boards and more than 18,000 realtors.
For more information, click on the BCREA website.
