Metro Vancouver

Real Estate Perspective - www.AlphonseQ.com

After the U.S. election in November, all bets are off with respect to interest rates. The start of a new presidential term is typically when tough medicine is doled out to fix the economy. An upward draft in U.S. rates would come as no surprise. Iʼd recommend locking in your mortgage rate now for a minimum four year term, if an increase in mortgage rates could jeopardize your financial position. Uncertainty and lack of consumer confidence are having an impact on Real Estate and Equity Markets. The Toronto Stock Exchange's main index plunged over 470 points today, dragged lower by retreating resource issues as oil prices fell. Hurricane Gustav appears to have spared major U.S. oil facilities in the Gulf of Mexico. The stronger U.S. dollar and materials sector meltdown has had a downward impact on the price of gold and other metals today on the Toronto Stock Exchange. We expect this volatility to continue. On the real estate front, we continue to see sales drop in Metro Vancouver (down 53.6% August 2008 from August 2007). Depending upon the neighbourhood, price declines have been moderate to extreme. As an example, a new one bedroom apartment in Lower Lonsdale that would have sold in excess of $400K last year, is now listed in the mid $300ʼs and is still for sale as of our publish date. Prices are definitely being pressured downward in some areas more than others. Those who bought real estate in the last twelve months hoping to resell at a profit might be hard pressed to realize their gains in the short term. Keep in mind that ten years from now, weʼll look back and wish we had taken advantage of this market, as prices are still expected to increase over the longer term.

On the positive side now, the current real estate malaise appears to be largely province-wide. Those selling in Metro Vancouver can still sell and buy relatively transparently elsewhere in the province. Homes that are properly priced and marketed are selling. For now, the days of pricing a home ahead of a rising market are gone, making it even more important to have your real estate team in place to ensure your success. Although I am not expecting the current market to turn around substantially over the next twelve months, it must be remembered that there are still many factors which attract the interest of buyers in BC:

1. Unemployment rates are at 40 year lows. There is still work for anyone who wants it.

2. There are still many large capital projects under construction requiring manpower.

3. In-migration to BC continues to attract tens of thousands of people from around the world and other parts of Canada.

4. The mining and resource sector is still very strong and is benefiting greatly from material demand world wide.

5. As we said in January 2008, we expect the dollar to remain above 90 cents and interest rates to remain at historical lows for the rest of the year.

Sales & Pricing Trends - August 2008

Metro Vancouver Homes

Detached home prices in Metro Vancouver were up just 1.6% from August 2007, but down 2% from last month reaching an average August benchmark price of $737,985.

The number of detached homes sold in August fell 58.2% from one year ago, while listings were down 5.5%. Prices of Metro Vancouver townhouses were up 3.8% in the past twelve months, reaching $463,433 in August 2008. The number of townhouses sold fell by 50.5% from last August. While the sales trend has continued to slow, inventory levels fell 32.8% from last month as frustrated sellers have removed their townhomes from the market.

Condominiums

North Vancouver townhouse prices were up just .6% from one year ago, but down 4% from last month. Sales were down 63.4% from last August, significantly lower than the year-to-date decline of 25%.

Condo prices in North Vancouver were down 1% from August 2007. The number of condo sales this August over last fell 61%. Year-to-date sales are down 27% from last year.

West Vancouver Homes

Squamish Homes

Detached Homes in Squamish reached a benchmark price of $565,643, up 12.7% from one year ago, but down 12.4% from last monthʼs all-time high. The number of detached homes sold in August fell 65.5% from August 2007, while inventory levels fell 12.8% from this time last year.

Whistler Homes