Wild price swings are a thing of the past, economists say
The years of wild swings in Lower Mainland's real estate markets should be behind the region in 2014 as 2013's rebound in sales settles down into relatively stable conditions, according to local economists.
In Metro Vancouver, the communities covered by the Real Estate Board of Greater Vancouver saw 28,524 sales through the realtorcontrolled Multiple Listing Service in 2013, which was a 14-per-cent gain on 25,032 sales in 2012.
"Home sales quietly improved last year compared to 2012," said Sandra Wyant, president of the Real Estate Board of Greater Vancouver, "although the volume of activity didn't compare to some of the record-breaking years" of the past decade."
The total ranked 2013 as the third-lowest year for sales over the last decade.
"After a really poor start to (2013), as we go into this year I expect to see a little more stability," said Bryan Yu, an economist for Central 1 Credit Union. "You're not going to see the volatility we saw last year, though there will be a slight drop off in momentum into the first quarter (of 2014)."
Central 1's forecast is for Metro Vancouver's property sales to increase by six per cent in 2014, mortgage rates to increase but remain relatively low and employment growth to continue in pace with a stronger economy that will be influenced by improving conditions in the United States.
"There's no real catalyst in terms of (spurring) a big pickup in activity," Yu said, "I expect to see a relatively stable real estate market - but again, a balanced market."
Yu doesn't expect big moves in property prices for 2014, either up or down.
Vancouver's benchmark prices - average prices for typical homes sold - held relatively steady over 2013 with the benchmark for detached homes reaching $927,000 in December, a 2.5-percent increase from 2012; the townhouse benchmark hitting $456,100, up 1.2 per cent from a year ago; and the condominium benchmark hitting $367,800, a two-per-cent increase from a year ago.
For 2014, Central 1 Credit Union's forecast is for prices to edge up about 1.5 per cent.
Shifts in 2014 real estate prices will also be influenced by the types of properties people are buying, with lower-priced townhouses and condominiums expected to make up a bigger share of the market, according to Lance Jakubec, a senior market analyst for Canada Mortgage and Housing Corp.
"The market share of multiples tends to ebb and flow," Jakubec said. "(Sales) were growing on the singles side (in 2013), but I think there will be a modest shift back to the multiple side."
Affordability will be a factor in the shift. The rebound in 2013 did elevate single-family pricing, and analysts, including Yu, expect affordability to be one of the constraints on Lower Mainland real estate markets.
Jakubec added that the number of new townhouses and condominiums that developers are building versus single-family homes will also dictate part of that movement.
While Jakubec does not make forecasts for individual communities within the region, he added that it will be interesting to watch how markets along the Evergreen Line rapid transit corridor perform over 2014.
Jakubec said population growth appears to be growing by similar jumps between Vancouver, Surrey and the Tri-Cities communities of Coquitlam, Port Coquitlam and Port Moody.
"If you happen to have a job that takes you across the Metro area, you sense that just from the cranes and activity that are spread out," he said.
In the Fraser Valley, realtors closed out 2013 with 13,663 MLS sales, 1.5 per cent lower than the 13,878 transactions recorded in 2012, despite a mid-year rebound in sales.
Valley prices in December remained stable compared with a year ago, with the benchmark price coming in at $549,500, up 1.9 per cent from December 2012. The benchmark for typical condos was $192,600, down 3.7 per cent from the same month a year ago.
"Generally speaking, 2013 overall was quiet," said Ron Todson, president of the Fraser Valley Real Estate Board. "Earlier in the year, our market felt the impact of the tighter mortgage regulations, rebounded some in the summer and then flattened again come fall."
The net result was a balanced market between buyers and sellers.