On January 30, BCREA's senior economist Cameron Muir released the first quarter housing market forecast for BC including breakdowns for Fraser Valley and Greater Vancouver.
The 2013 predictions for Fraser Valley have changed since last fall, becoming more conservative. Muir still expects home sales to increase in 2013 compared to 2012, but not to the degree that his department anticipated three months ago. In addition, he's forecasting home prices will moderate at a slightly faster rate.
Fraser Valley REALTORS® can expect sales to increase by 2.4 per cent this year compared to 2012; and average MLS® prices will continue to slide 3.3 per cent this year on top of the 3.7 per cent reduction during 2012.
Muir states in the report, "Headwinds in the global economy continue to constrain growth in British Columbia. The US has yet to generate enough employment to take a serious bite out of their jobless rate, while early signs of burgeoning domestic demand in China weren't enough to keep economic growth from slipping to a ten-year low in 2012."
The forecast describes 2013 as a transition year to next year when sales are expected to rebound even further and prices will stabilize. In 2014, BCREA is predicting an increase of 7.5 per cent in Fraser Valley home sales and prices to remain flat (-0.6 per cent) compared to this year.
Muir describes lower home prices in the Fraser Valley as a move in a positive direction improving affordability and encouraging potential buyers back to the marketplace. "In addition, many potential buyers that stayed on the sidelines in 2012 will likely enter the marketplace over the next year as the relatively strong financial condition of BC households precludes any deflationary spiral."
For Greater Vancouver in 2013, Muir is forecasting slightly stronger sales than Fraser Valley, an increase of almost 10 per cent this year compared to 2012, and not quite as high reductions in MLS® home prices -2.2 per cent on average in 2013 and -0.3 per cent in 2014.
CMHC's Housing Market Outlook, released in the fall of 2012, anticipates sales in the Fraser Valley will increase by 1.4 per cent in 2013 compared to 2012, while prices remain relatively stable. CMHC only releases two forecasts per year — spring and fall — while BCREA releases quarterly.