LangleyAdvance
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Friday, August 6, 2010
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Husband and wife Doug and Krista Gilbert, a real estate team for the past 20 years, believe the sudden plunge in real estate sales is a blip.
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There are a lot of unsold homes in Langley, as buyers fled the market in droves in July. by Matthew Claxton
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Housing sales in the Fraser Valley plunged in July, dropping by almost 50 per cent from last year’s levels and by almost 40 per cent from June. “Last year, we experienced the busiest July in our history and this year it was the quietest in a decade,” said Deanna Horn, president of the Fraser Valley Real Estate Board. “Although the real estate market typically slows in the summer months, we didn’t anticipate this level of change.” The number of homes sold in Langley dropped by more than half, month over month. Langley realtors have varied views on whether the sudden drop will be a blip, or will carry through the next few months. “I don’t think we’ll be on fire throughout the fall,” said Dan Bennett, a Homelife realtor who has been in real estate in Langley for 30 years. On Thursday, he was going through the stats, trying to draw from them advice for his clients. He points to the sales-to-listings ratio, which last month saw about one in 10 homes listed for sale actually sell. In a healthy, balanced market, the number should be closer to one in five or one in four, Bennett said. However, he believes that the situation is better than in 2008.
“In 2008, everything just kind of fell off the edge of the map,” Bennett said. People were worried that they would lose their jobs in the recession, and they abruptly stopped buying. Now, people are somewhat more confident as Canada’s economy is in a better place. “This is just another one of those market cycles,” he said. Bennett also noted that people are sometimes reluctant to sell a home they bought during the boom years if prices are now lower. “But if that house has dropped, the one you’re going to buy has as well,” Bennett said. The people who drop their prices are the ones who will sell, and a lot of the home currently listed have already seen price cuts, he said. Doug Gilbert of ReMax Treeland is more optimistic. “This summer I think is a blip,” he said. Gilbert expects the housing numbers to largely bounce back closer to normal by September. He said the HST has been a big part of the problem, as many people believe it applies to sales of existing homes. The tax applies to the sale of new homes, although there are rebates for lower-priced houses, townhouses and apartments. It also applies to many of the fees that surround a home purchase, such as commissions, legal fees, and appraisals. The FVREB also partly blames the HST for
the sudden decline. Many people rushed to buy before the tax took effect. Gilbert also points to rising interest rates, but both he and Bennett note that despite recent increases in the prime rate, mortgage rates are still at historically low levels compared to the past few decades. In July, 83 detached houses sold in Langley, down from 180 in July of 2009, a 53.9 per cent drop. Townhouse sales dropped to 54 from 116, and apartment sales slid to 29 from 57. More notable was the month-tomonth drop from “I don’t June’s sales. Sales think we’ll of houses dropped 34.1 per cent from be on fire June’s numbers in throughout Langley, townhouse the fall.” sales dipped by 27 per cent, and apartDan Bennett ment sales dropped by 39.6 per cent. Broadly similar trends were seen across the board in other nearby communities, from Surrey and White Rock to Abbotsford. The benchmark housing price – the average price for an average home – dipped slightly in July, down to $510,470 from $518,355 in June, a 1.5 per cent decline. However, prices remain almost seven per cent higher than in the same time last year, when prices were just starting to recover from the sudden dip of more than 10 per cent. Stocks of unsold housing hit more than 10,800 units across the region, down slightly from June.