The BC Real Estate Association’s (BCREA) latest monthly analysis of provincial real estate sales flags the potential for a return to more balanced market conditions by the end of the year, even as a lack of supply continues to drive home prices higher. BCREA chief economist Cameron Muir said home sale volumes are moderating, while more buyers are listing properties.
Buyers aren’t out of the woods yet, however. Muir suggested that the improvement might simply mean that buyers will be faced with a 10-year low in supply.
“Instead of 20-year lows, we’re at 10- or 12-year lows,” he said last week. “That trend will have to continue some time before we see any balancing in the marketplace.”
But if misery loves company, the world has plenty to offer local buyers wrestling with local realty.
Reports from south of the border indicate a similar dearth of listings across the U.S.
Resale listings hit a 17-year low earlier this year, and Lawrence Yun, chief economist with the National Association of Realtors, continued to express concerns at the end of July.
“Low supply is an ongoing issue holding back activity,” he said. “Housing inventory declined last month and is a staggering 7.1% lower than a year ago.”
While every market is different, supply and demand play a role, said Tom Davidoff, director of the University of British Columbia’s Centre for Urban Economics and Real Estate. On the one hand, strong demand might eat into listings; on the other, people might opt not to replenish listings.
“One thing I heard is that high prices are preventing trade-up,” he said of local markets.
This isn’t typical, however, because higher prices should make it easier for owners to trade up, freeing more affordable properties for first-time buyers. But price escalation could be leaving everyone behind.
“When markets are extremely tight, home sellers, if they’re going to sell and buy in the same region, they’re going to be faced with the same tight supply,” said Muir.
But he expressed faith in home prices to induce a correction (something those who #donthaveamillion might question).
Find out about Tight supplies here