ReMax Little Oak Realty

#9-2630 Bourquin Crescent W., Abbotsford, BC V2S 5N7

bus: 604.615.6657

toll free: 1.800.668.8661

fax: 604.850.2325

e-mail: stevedemarco@remax.net

Each office independently owned and operated.

Year of the Real Estate Rebound for the Fraser Valley, Fraser Valley Real Estate Board (FVREB)

Surrey, BC, January 5, 2010

Results from Fraser Valley Real Estate Board’s Multiple Listing Service (MLS®) in December reflect the real estate story of 2009: recovery.

“In 12 months, we went from the worst January in 20 years to the third best

December,” said Paul Penner, President of the Board. “Home buyers took

Boxing Day shopping to new levels with some Fraser Valley REALTORS®

showing multiple homes per day between Christmas and New Years.”

According to Penner, a significant portion of the 148 per cent increase in activity

in December’s sales, 1,260 compared to 508 in December 2008, can be attributed

to first-time home buyers confident with the current economic conditions and

taking advantage of all-time low interest rates. “An informal poll of our members

in December revealed 40 per cent of home sales were by first-time buyers when it

would normally be in the 25 per cent range.”

The trend overall for 2009 was one of increasing sales, decreasing inventory and

prices rebounding. The Board’s MLS® processed 16,721 sales in 2009, compared

to 13,194 the previous year, an increase of 26 per cent. However, it received 15

per cent fewer new listings during the same time period – 30,221 in 2009 compared

to 35,651 in 2008. Over the year, the number of active listings for buyers to choose

from dropped by 34 per cent going from 9,960 properties in December 2008 to 6,534 in December 2009.

“We’re seeing the combined effect of fewer homes being listed, which is normal for this time of year, a flurry of buying activity, plus a decrease in the number of new homes being built. This has put pressure on prices in the Fraser Valley, particularly on homes in the lower to mid-range markets,” explained Penner.

The MLSLink Housing Price Index (HPI) benchmark price for detached homes was $497,732 in December compared to $464,189 in December 2008, an increase of 7.2 per cent. Although prices have gradually recovered, they have not yet reached the previous benchmark high of $513,798 in May 2008.

The benchmark price of Fraser Valley townhouses in December 2009 was $318,174, a 7.4 per cent increase compared to $296,296 in December 2008. That price also last peaked at $335,991 in May 2008.

The benchmark price of apartments decreased by 0.3 per cent year-over-year going from $237,786 in December 2008 to $237,157 in December 2009. It’s previous high was in April 2008, at $260,037.

B.C. Home Prices Could Hit New Highs in 2010, by Derrick Penner Vancouver Sun, October 20, 2009

Central 1 Credit Union’s chief economist Helmut Pastrick predicts that, on an annualized basis, the average home price in B.C. will climb to a new high of $463,800 by the end of 2009, before advancing to $497,800 in 2010 and $534,800 in 2011. The rebound in B.C. housing sales from the recession is the strongest on record, Central 1 Credit Union said Tuesday, predicting that property prices will regain all of their downturn losses by the end of this year. Pastrick said the housing sales rebound has already surpassed the strength of the recovery from the 1991 recession. Pastrick said the resurgence has combined with diminishing inventories of unsold homes to force prices upward.

Prices will eventually hit an “affordability squeeze,” Pastrick said, reaching a ceiling that forces new buyers out of the market.

However, in one of the first major fall housing forecasts, Pastrick said observers should not “underestimate the power of ... very low and attractive mortgage rates” to keep driving the market. He said that as buyers embrace historically low mortgage rates, that momentum “will carry into 2010, driving unit sales and prices to new highs.”

He predicted that, on an annualized basis, the overall average home price in B.C. will climb to a new high of $463,800 by the end of 2009, erasing recession-era losses, before advancing to $497,800 in 2010 and $534,800 in 2011. He also forecast that sales through the Multiple Listing Service across the province will climb to 85,500 this year, and 109,000 in 2010.

Not all regions will experience the recovery equally, Pastrick said. The gains will be concentrated in the bigger, higher-priced markets of Vancouver, the Lower Mainland and the Okanagan, and no single region will see annualized average prices for 2009 surpass previous peaks.

Pastrick said his forecast relies on B.C. continuing to recover from the recession, and that at some point in 2010 the pace of sales will slow down. He expects sales transactions to slip to 101,400 in 2011, though prices should continue to rise. The forecast calls for B.C. housing starts, after falling to 14,600 units this year from 34,321 in 2008, to recover to 21,400 units in 2010.

“If [economic] recovery is weak, or does not come, then prices could potentially stop rising and back off somewhat,” Pastrick said.

Carol Frketich, regional economist for Canada Mortgage and Housing Corp., said in an interview the Central 1 forecast is consistent with other forecasts for the B.C. market. Frketich said forecasters are getting a very strong signal from housing resale activity that points to an overall pickup in housing. However, she said the fact that Lower Mainland markets have accounted for 40 per cent of total provincial sales has had an influence on provincial totals. A lot of higher-priced homes have been selling in the region, which helps push up the average provincial price.

The Lower Mainland has also seen its unemployment levels decline, another positive indicator that economic conditions will improve.

“The key to strength in the housing market is, we need to see the recovery continue, and mortgage rates staying relatively low,” Frketich said. “And currently, those are the conditions we have.”

Cameron Muir, chief economist for the B.C. Real Estate Association, however, maintained a more conservative outlook for home-price growth, given that the market is up against a slow economic recovery. “My expectation is that home prices will grow very modestly in 2010,” Muir said. Muir said much of the buying activity in the market is the result of demand that built up during last fall’s market collapse. However, as that demand is filled, and as mortgage rates rise in the latter half of 2010, Muir said he expects sales will ease off the record pace that Pastrick has predicted, “reflecting an economy that is coming out of recession.”