New statistics show that local real estate sales rose some 33 per cent in August compared to the same period last year. But this increase, as impressive it might sound, appears to be consistent with a market that is still trying to recover earlier losses.
The British Columbia Real Estate Association (BCREA) reports the increase in new sales figures released this month. Total residential sales in the South Okanagan region rose by 33.7 from August 2010 to August 2011. Notably, average prices for the South Okanagan dropped during the same period. Whereas the average home in the South Okanagan sold for $309,765 this August, it would have fetched $326,517 a year ago, a decline of 5.4 per cent. This figures suggest that South Okanagan realtors are selling more homes, but at lower prices. Home buyers, in other words, have the advantage, a point noted by BCREA chief economist Cameron Muir.
“Most regional markets exhibited buyer’s market conditions, meaning little upward pressure on home prices,” he said.
Phrased differently, the current supply of residential real estate still exceeds demand. This imbalance emerged during the middle years of the previous decade, when developers increased supplies in the face of rising prices, only to witness a steep market decline thanks to the Great Recession. Consider the numbers. Residential sales in B.C. peaked from 2005 to the start of 2008, before dropping considerably be 2009. Sales rose steeply through 2010, only to fluctuate again. The general trend line now hovers between the peak of the mid-2000s and the bottom of 2009.
BCREA released its most released figures against the backdrop of growing fears about what economists call a double-dip recession, another round of economic decline after the recovery that followed the Great Recession. If these fears fuelled by the sovereign debt crisis in the Euro zone and anemic economic growth in the United States turn out to be accurate, local real estate numbers might also experience another period of flux.