The hundred kilometer appetite for real estate around Vancouver once again dominates sales and potentially skews thinking about the health of the British Columbian real estate market.
I always read with interest the British Columbia Real Estate Association (BCREA) housing forecasts and was delighted yesterday to receive the fourth quarter housing forecast just released on November 8, 2011. Cameron Muir, Chief Economist and his team do a great job and I appreciate the depth of analysis but worry that public policy might be developed solely on the basis of these figures without regard for the vast area that lies further than 100 kilometers from the Vancouver downtown core.
According to the BCREA forecast, provincial average BC housing prices will rise by 11.8% to $505,178 by year end 2011 and unit sales increase 3.2% over 2010 totals to 77,000. No doubt, television broadcasters will soon once again be painting a glowing picture of the BC housing market - but once you leave that 100 km area around Vancouver what does the remainder of this vast province look like? I was curious, as I am a Chilliwack Fraser Cheam Realtor© working primarily in the eastern Fraser Valley outside of the 100 km radius, I decided to boil down the same numbers given by BCREA but excluded the Greater Vancouver and Fraser Valley real estate board areas from the calculations.
You may wonder what that leaves. Well there are 11 member real estate boards in the province the remaining 9 boards are Victoria, Vancouver Island, Chilliwack and District, Powell River Sunshine Coast, Kamloops and District, Okanagan Mainline, South Okanagan/Northern Lights, Kootenay and BC Northern. An area of about 874,000 square kilometers or to put it more simply, 95% of the province.
After the number crunching was over I found that the average sale price drops from the provincial average of $505,178 to $344,482. In other words, average housing prices are almost a third cheaper in areas outside the 100 km Vancouver real estate area. Will the "outside the 100 km real estate area" enjoy the 11.8% average house price increase projected for the entire province? No. The projections once the Vancouver and the Fraser Valley Real Estate Board areas are again removed are that average home prices in the remainder of the province fall from the 2010 average of $350,657 to a projected year end average of $344,482; a drop of 1.7%. Sale unit numbers for this area beyond 100 km also drop by 3% from 29,519 in 2010 to 28,870 projected for the end of 2011.
Quite a contrast from the rosy provincial picture when Greater Vancouver and the Fraser Real Estate Boards are included and something that policy makers need to be aware of.
If you are wondering what impact the current market is having on the value of your British Columbia real estate property I would suggest that you contact either a professional member of the Real Estate Institute of British Columbia or a local Realtor®.
Stephen Mullock RI is an award winning full-time real estate agent with 30 years of experience and hundreds of sales. Thinking of buying or selling real estate in the Fraser Cheam communities of Chilliwack, Agassiz or Harrison Hot Springs? Contact Steve (click here) for experience, local knowledge and friendly service you’ll be happy you did.