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Home buyers ‘sitting on their hands’ in buyers’ market

Derrick Penner, Vancouver Sun, September 5, 2008

It's a buyer's market in real estate around British Columbia, according to a new Landcor Data Corp. report, although company president Rudy Nielsen reckons buyers are just sitting on their hands for the time being.

Landcor tracked lower sales and slower price gains in most markets around the province to the end of June. The median prices of some home types dipped into negative territory from the first to the second quarter, Landcor found.

"I'm not an economist," Nielsen said, "but it seems everybody is sitting right now on their money, sitting back to see what's going to happen [with the market]."

Looking at the numbers, Nielsen said "the main thing we found in this report is there's no panic [in the market]."

Landcor counted 64,268 property sales recorded by B.C.'s land-title registry office to the end of June, which was down just over 15 per cent from sales in the first half of 2007.

That counts more than the Multiple Listing Service sales figures, which are reported by real estate boards and tend to get wider circulation.

Landcor's report, however, shows that sales in the second quarter -- 36,612 -- showed a steeper decline of 19.5-per-cent decline.

The median price tracked by Landcor across B.C. was $417,780 in the second quarter of 2008, compared with $414,794 in the first quarter, and $380,018 in the second quarter of 2007.

"To me, that's a positive," Nielsen said of the median sales figure, which indicates people haven't lost a lot of equity in their properties.

There are areas, however, where those median prices -- which reflect the point at which half of prices are above and half below -- slipped between the first quarter and second quarter.

In the Fraser Valley, while median townhouse prices remained even from the first quarter to second quarter, and detached home prices advanced $5,000 between quarters, condominium prices slipped almost four per cent.

The median Fraser Valley condo price, $235,000 in the first quarter, declined to $226,000 in the second.

In Greater Vancouver, condominium apartment prices also slipped, but almost imperceptibly, from $336,500 in the first quarter to $336,000 in the second quarter.

In the Okanagan, Landcor found it was median townhouse prices that fell, by almost three per cent to $320,450 from the first to the second quarter.

"There is a lot of inventory on the market [in the region]," Nielsen said. "Buyers can pick and choose what they want."

Nielsen added that the picture is the same on Vancouver Island, where the median condominium price slipped by 3.5 per cent to $275,000.

The Landcor report also showed that fewer out-of-province buyers were active in the B.C. market in the first half of the year.

Albertans, the biggest group of non-resident buyers, bought 1,320 B.C. properties in the first half of 2008, down 21 per cent from the first half of 2007.

Americans, although a much smaller buying group, showed a steeper decline. Americans bought 127 properties over the first half of 2008, a 40-per-cent drop.