Prospective home buyers are understandably a bit jittery these days with the ongoing talk of the potential housing bubble in Toronto and Vancouver, two of the country’s hottest real estate markets.
Contrary to reports of a dramatic drop in housing sales in Vancouver, where prices continue to reach new heights, there’s no sign of a bubble in Maple Ridge or Pitt Meadows, says Darcy McLeod, a local realtor with Remax Results Realty and a current director on the Real Estate Board of Greater Vancouver.
“Prices are stable here,” he says.
There is no bubble to burst in Maple Ridge and Pitt Meadows and it’s unlikely the bottom will fall out of the local market if there are no unforeseen outside pressures, he added.
“There’s no reason for anyone to expect prices will drop or rise here very much in the foreseeable future.”
His instincts are backed by Scotiabank chief economist Warren Jestin, who recently stated that small interest rate hikes and slower growth are likely, but “if there are no big macro-economic shocks, we’re not going to see dramatic changes.”
McLeod points to the steady availability of new homes in this community, as well as plenty of older homes up for resale as a couple of reasons prices have remained consistent in Maple Ridge and Pitt Meadows.
“There’s still great value here,” he says. “There’s a great range in prices for everybody.”
The Housing Price Index shows local prices have remained constant in the past year for detached houses with the average benchmark home going for $496,000. Townhomes are down in value by about two per cent over last year to just under $275,000.
After a small recovery bump of about three per cent in housing prices after the 2008 economic downturn, pricing in both Maple Ridge and Pitt Meadows has remained relatively stable for several years now.
“It’s been pretty much flat,” McLeod says.
That doesn’t mean all this talk about housing bubbles and bursting real estate dreams aren’t having an effect on prospective buyers.
Housing sales in Greater Vancouver, in which Maple Ridge and Pitt Meadows statistics are included, were down 13 per cent last month from April 2011. That’s the lowest April sales performance since 2001.
As well, there are now more than 16,500 houses on the market in the region, up eight per cent from March and higher than the 10-year average.
“There’s a little bit of disconnect,” McLeod said. “Buyers are naturally more wary while sellers remain optimistic.”
GVRB president Eugene Klein insists the market has been stabilized by the increase in available houses and has been in balanced territory since the spring of 2011.
“Although April sales are below what’s typical for the month, we continue to see a balanced relationship between buyer demand and sellers supply,” Klein said about the downward sales trend.
Other factors, such as the uncertainty of the HST or talk of mortgage rate increases have also affected buyers. Despite the continuing confusion around the transition from HST back to PST, new legislation this spring means that new home buyers will get a break until April 2013, when more substantial changes are coming.
Last month, the B.C. government changed the HST rebate grant threshold from $525,000 to $850,000, which will make some difference for new home buyers. The government claims that 90 per cent of new homes built will now be eligible for the HST rebate as of April.
Home buyers nabbing a new $850,000 house will get up to a $42,500 grant. Homes at $850,000 and above will be capped at the $42,500 grant level.
While McLeod suggests the net effect of the different taxes is minimal, the changes “cause people to pause.”
Yet, he expects Maple Ridge and Pitt Meadows sales to remain steady, despite the overall downturn.
These community-specific market trends are also echoed at the local level, McLeod says.
Even within communities pricing differs substantially with unique statistics and sales results.
“Each neighbourhood in Maple Ridge has its own little micro-market that might be very different from one across town,” he says.
It’s important to take into account outside economic forces but understanding these local conditions is vital when looking to buy near home.
“There are influences you might not expect to have an effect,” he adds. “It’s good to get local advice.”