Colin Breadner's Prince George Real Estate Blog

Cooling off forecast in real estate sector

Written by Citizen staff
Tuesday, 06 May 2008

In a forecast released Tuesday, the BCREB predicted the average price for a single-family home in the city will increase by three per cent during each of the next two years, to $248,000 and $256,000, respectively, compared to a 22-per-cent jump to $240,442 experienced in 2007.
Moreover, the number of units sold is expected to continue to decline, by 13 per cent to 950 sales in 2008 and five per cent to 900 in 2009, following a drop of nine per cent to 1,092 in 2007.
Multiply the average price by the units sold and the market for single family homes is predicted to drop by 10 per cent to $235 million in 2008 from $263 million in 2007 and to fall a further two per cent to $230 million in 2009.
Meanwhile, housing starts are forecast to drop five per cent over 2008 to 310 from 328 last year, when the total was up by three per cent. And over 2009, starts are expected to fall a further two per cent to 305.
Broken down further, starts on single-family homes are expected to fall by six per cent, to 270, from 288 in 2007, when the total rose by two per cent. And in 2009, the total is expected to fall a further four per cent to 260.
For multi-family units, starts are expected to remain the same in for 2008 at 40 and then rise to 45 in 2009, a 13-per-cent hike.
Prince George won't be the only community facing a slowdown -- the BCREA is predicting a provincewide moderation.
“Some weakness on the export side of the economy and eroding affordability will have an impact on housing demand over the next two years,” said BCREA chief economist Cameron Muir.
But he added that while the weak U.S. economy is negatively impacting the forest industry and tourism, "the B.C. economy is forecast to grow 2.5 per cent this year and 2.7 per cent in 2009, a higher rate of growth than most other provinces.
"Consumer spending, employment growth and net migration in the province are expected to remain robust and will continue to underpin housing demand through 2009," Muir said.

posted by Colin @ 11:10 AM