Where’s the market heading?
According to both BCREA and CREA, home sales are forecast to decrease in 2012 compared to last year, but not enough to destabilize prices. Both indicate the outlook for 2013 is a slight improvement over 2012.
For Fraser Valley, BCREA is projecting residential home sales overall to decrease by 3.2 per cent (with a 5.5 per cent decrease for detached) this year compared to last, while average prices overall will dip by 1.5 per cent (detached will remain on par with 2011).
“Consumer demand in the Fraser Valley is expected to continue trending at the 10 to 15 year average both this year and in 2013,” BCREA announced in it’s June 2012 Housing Forecast, attributing its Fraser Valley forecast for moderation to modest demand and plenty of inventory.
CREA also revised its 2012 and 2013 forecast for home sales in Canada, predicting generally stable resale housing activity this year, with sales declines in BC and Ontario and growth in Alberta and Saskatchewan.
CREA is projecting sales across BC will decrease by 4.5 per cent in 2012 and by 2013 that decrease will shrink to 0.8 per cent. Similarly with prices, CREA is forecasting home prices in BC will decrease by 3.4 per cent this year and by only 0.5 per cent next year.
In its June statement, Gregory Klump, Chief Economist said, “CREA’s forecast for annual activity this year has been boosted by what’s already in the rearview mirror.
“Activity is still expected to recede, but from a higher level than previously anticipated. The pace for interest rate increases next year is expected to be very slow and gradual, so combined with further job growth, Canada’s housing market should remain resilient.”
Because of overall economic conditions improving, BCREA says the outlook for Fraser Valley in 2013 is more optimistic than this year, while still being offset by gradually rising interest rates. It’s projecting sales in the valley will rebound by 3.1 per cent with average prices remaining effectively unchanged with an increase of 0.2 per cent from 2012 to 2013.