Sales fall but prices hold in Northern BC real estate

2007 was wild and the start of 2008 strong, but as 2008 nears its end, the real estate market has cooled down significantly in Prince Rupert.

It's a shift in fortunes that has begun to change the dynamic of the Prince Rupert real estate scene, moving the market from a sellers market to one where the buyer is firmly in control at the moment.

Thursday's Daily News features some background on the current state of our real estate market with an eye towards the future, that for now seems dependent on the fortunes of the Port of Prince Rupert, the review was featured as the front page, headline story.

SHARP FALL IN NUMBER OF HOMES SOLD ACROSS NORTH
By George T. Baker
The Daily News
Thursday, November 13, 2008

Pages one and two

Real Estate sales numbers in B.C.'s North have dropped 22 per cent from last year, according to the B.C. Real Estate Association.

In its Fall 2008 report, the BCREA said that homes sales across the region had fallen to 4,240 homes from 5,400 from the year before.

"In a slow market there is a certain segment of the population that will always end up being able to make a (property) purchase and the fact of the matter is that it really is a buyers' market in Prince Rupert," said Victor Prystay of Royal LePage Prince Rupert.

But the news isn't all bad. The BCREA expects sales to bump up by four per cent in 2009, and home prices have grown by 10 per cent since last year.

However, the association warns those numbers were achieved in the first six months of the year and the average price for 2009 is expected to be seven per cent lower.

BCREA Chief Economist Cameron Muir said this is not just a regional decline, but also a provincial one.

"It's a reflection of what is going on in B.C. The North might have seen a 22 per cent drop but Vancouver saw a 30 per cent drop," said Muir.

He added that it was all about consumer confidence, saying that higher fuel charges, lowered value on investments and a weakening US economy all impacted the North directly and made buyers wary of spending.

"I think the housing market should trend back to balancing out sometime next year but in the meantime housing affordability is quietly improving," said Muir.

Historically, this is all part of the up-and-down style of the North Coast economy, said Prystay.
Figures from the BCREA show that Northern home prices have ridden a sales rollercoaster during the past 14 years. In 1994, a house could be had for just over $100,000. By 2000, growth flat-lined after a small increase in the late 1990s and had since risen steadily, peaking at around $250,000.

Prystay, however, remains quite optimistic about the future of local housing sales.

Prystay said that the housing sales numbers started taking a hit in late January and have remained almost stagnant since then.

"Last year (2007) was big. And the early part of the year was fairly strong and then it died right off," said Prystay.

He added that Prince Rupert's economy is reliant on the Port of Prince Rupert and that you can point to the different happenings in the past year with the port as an indication of housing sales.

"Our economy is driven by what is happening at the port. So what we had was the first ship arrival in Oct. 31, 2007, and there were lots of people getting hired, moving up from Vancouver, who had money to spend.

"But the reality of that first eight months of port activity is there was only one ship per week," said Prystay.

With the slow build to the port's business, some workers who might have purchased a home were reticent to do so until the hours picked up at the port.