In December of 2012 we noticed for the first time in 11 months in the Okanagan, Shuswap areas Real Estate housing statistics turned down. The absorption decreased, sales dereased relative to December of 2011 and the inventory started to rise again.
Now, in January of 2013, we have another month of decreasing market statistics. Normally this would concern us. However, there is a force pulling on the market that explains this temporary downturn. After surveying Realtors we have found that virtually all new home buyers are requesting that they have a longer closing date until after April 1, 2013. Their "perception" is that the purchase will be 7% cheaper because the GST is being reinstated. When the HST came in July of 2010 there was a surge of activity before it's arrival and a downturn after it was instated. The same is happening in reverse as the HST leaves us and the GST comes back in.
The market is slowing and there will likely be a surge of activity after April 1st. Some say that this is such a small section of the market that it should not make a difference. However, if just 1% of the buyers are removed from the market it creates a ripple effect. The sellers of the houses that that 1% were going to buy cannot sell and those people cannot buy and those sellers cannot sell and so on.
In general when Real Estate markets take a change in direction for an extended period of time they fall into a 9 year cycle, give or take a few years. This one will likely be no different. Overall 2012 was an increase over 2011 and overall 2013 will likely be an increase over 2012. We'll see how correct we are in the next few months.