Starting February 1, 2015 in any 2-year period when you refer your friends and family to Michelle, the rewards begin and can lead you to a fee trip to Hawaii!

This is a copy of my latest post on my other blog entitled coquitlamrealestatemarket.com. I hope you find it informative.

In the past 60 days the number of news articles predicting a housing market correction in BC has definitely ramped up. Oh there are always articles about our overheated market and the imminent bursting of the proverbial bubble. Lately those doomsayers seem to be getting a little traction. The truth of the matter is that summer is typically a slow time in real estate anyway. Spring (starting in February) is the real busy time. Sales and listings usually grow by 30 -40% between December and May of any particular year. Is it any suprise then that the summer months are slower?

Let’s look at the fundamentals. Interest rates are low and don’t look likely to rise over the next 12 months. The economy overall is good despite the fact that BC shed jobs over the past quarter. In migration into BC continues. The supply of land in the Lower Mainland is and always will be limited. The world economy looks a little shaky with the never ending European debt crisis and US growth looking anemic. Affordability in BC is the big question mark. The Real Estate Board of Greater Vancouver reports that the Housing rice Index (HPI) has risen yet again this year. Is the market just going through a slight defaltion? My answer is probably. In 2008 prices were very high. Global shocks brought on by the failure of Lehman Brothers and the ensuing hysteria caused a sharp fall in prices in the local area. Buyers waited and watched as prices fell. What was happening was that people were waiting for the bottom. They didn’t a decide not to buy. They didn’t change long term plans about real estate. Buyers were just waiting. Who was waiting though. What buyers wait. The answer is First Time Buyers (FTB). FTB’s are the most important part of the equation. They are the fertilizer of the market. Without them nothing grows.

Our local market has not fallen off a cliff. We are not in for a long, protracted declining market like we saw in the NDP dominated 90′s. Buyers are still there. They are just waiting to see a correction. When prices get low enough they will come back. This fall will be slow but I predict that buyers will come back into the market in late fall and for sure by February. I can’t wait.

Just looking at my recent posts and it seems I've not been very active. Truthfully I post mostly to my other blog, www.coquitlamrealestatemarket.com. It's hard when you're busy to blog, especially if it doesn't come naturally. I can definitely say that the market is still very robust. Prices are not rising but there are plenty of buyers out there still looking for good homes. I check out the MLS's hotsheets almost every day. This shows all new listings and sales reported for that day. I like to go back 2 days to get a better running average. My rule of thumb is that when sales are more than 50% of new listings we are in a balanced to seller's market. When sales run lower, say 30% of new listings for a sustained period we will slip into a buyer's market. Right now things are above 50% but slowing.

Detached Home Sales In June 2009 Compared to June 2008

My prediction for the market this year is that it will remain flat or decrease slightly. If we can rely on history as our guide, downturns in the real estate market are long lived. Look at the last 30 years. The market in 1980 was overheated. It crashed in 1981-1982. It remained in the tank until 1988. Prices doubled between 1989 and 1990.  In other words, the market was in a bit of a coma for roughly 6-7 years from 1981-1982 to 1988. Home sales were buoyant until 1994-1995. Again, in that period of time we saw prices more than double, we saw scads of new product being built, we saw multiple offers and bidding wars. It only lasts so long though. In 1995 it was like someone turned out the lights. Prices declined steeply (10%) in both 1995 and 1998. Things didn’t turn around again for another, you guessed it, 6-7 years. In May 2001 the BC Liberals took office in BC and I have to tell you, It was like someone turned the lights on again. I’m not saying that it was all their doing.  I do believe, however, that people began to have confidence that things were going to be OK. In reality it was the beginning of a long upswing in the economy in general. Price increases really took hold in the spring of 2002 when interest rates dipped substantially. So 2001-2002 to 2008 is 6-7 years. I’ve been waiting for the market to stall. At the beginning of 2008 there was a sense of waiting for the other shoe to fall. It really doesn’t matter what the specific reasons for a market correction are. In 1981 it was skyrocketing interest rates. In 1995 it was rising (not skyrocketing) interest rates. In 2008 it’s been a global meltdown. Whatever the reason it seems that the market stays flat for 6-7 years and then increases for 6-7 years. I’ve been selling real estate since 1987 so I’ve personally seen a lot of it.