Regina home sales expected to decline
Leader-Post and Financial Post February 10, 2009
REGINA -- Home sales in Regina will decline slightly in 2009, but average prices will remain around the $240,000 level, says the Association of Regina Realtors.
The association was responding to a forecast by the Canadian Real Estate Association (CREA) predicting a 13-per-cent decline in home sales and five-per-cent decline in average prices in Saskatchewan in 2009.
The CREA report released Monday forecast Saskatchewan home sales to decline 12.8 per cent to 8,900 in 2009 from 10,200 in 2008. Average prices in Saskatchewan are expected to fall five per cent to $213,400 in 2009 from $224,585 in 2008.
Gord Archibald, executive office of the Association of Regina Realtors, said the national forecast may be a bit negative with respect to Saskatchewan generally, and Regina in particular. "I think we're going to have solid demand for the year,'' Archibald said.
For the 30 years prior to 2007, Regina home sales on the multiple-listing service (MLS) averaged between 2,500 to 3,000. "I wouldn't be surprised if we had closer to 3,000 sales this year. That's compared with 3,300 last year.''
He said if the city continues to enjoy reasonably strong economic and population growth, that should keep demand for housing at reasonably high levels.
Archibald said the only "red flag'' is higher-than-normal number of listings on the market. "Our supply levels are about double what they normally are. Inside the city, we've got over 800 listings. Normally, there would be about 400.''
He said the higher number of listings will tend to slow the market down, but not reduce the number of sales. "That may not necessarily translate into fewer sales, but it will affect the velocity of the market. It will take longer for a home to sell. That puts the buyer in a better position.''
He anticipates that by the second quarter most of the oversupply of listings will be absorbed, bringing supply and demand more into balance. "There's lots of choice out there right now. We're not seeing the same kind of upward pressure on prices."
As for prices, "he expects that the average price of $240,000 set last year will continue for the balance of 2009. January was an anomaly in that we had a lot of low-end properties sell, so the average price for the city was only $213,000. But that wasn't indicative of an across-the-board decrease in value; it was more the mix of properties sold.''
He said the 60 or so sales In February have averaged around $235,0000 and the average is expected to rise slightly through the year. "I would expect it in and around the $240,000 range. When we hit spring, it will edge up higher.''
The Canadian Real Estate Association said Monday it expects sales this year across the country to drop to 2000 levels after a 17-per-cent decline in activity from 2008. CREA said sales will drop to 360,900 nationwide this year and not rebound until 2010, when they are expected to rise by 10 per cent.
The group, which represents 100 real estate boards across the country, said the average sale price is expected to fall eight per cent this year on a national level before rising 1.1 per cent in 2010.
"Consumers are in a funk. Every bit of economic news that comes out seems to confirm what people had expected, that we are heading into rough economic times," said Gregory Klump, chief economist at CREA.
"Everybody is hunkered down, expecting a deep, long recession. If you are not secure in your job, prices can be cut in half and interest can be free, but you are not going to buy a home."
Despite the dramatic slowdown in sales, price declines have been relatively muted. The average sale price of a home last year was $303,594, a 0.7 per cent drop from 2007. By the end of 2009, the average sale price will fall to $279,400 before climbing to $282,400 in 2010, the CREA forecast said.
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