There were 3,284 properties sold in BC last month, down 50.8 percent from April 2019, during a time when the market is typically moving full steam ahead.
The steep drop in April activity reported by the British Columbia Real Estate Association (BCREA) last week meant that total sales volume fell by 46.9 percent over the previous year, from $4.6 billion in April 2019 to $2.4 billion last month.
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“We expected to see a sharp drop in sales for April as we confronted the COVID-19 pandemic,” said BCREA Chief Economist Brendon Ogmundson in a media release.
“However, buyers and sellers are adapting to a new normal, and activity should pick up as the economy gradually re-opens,” he added.
On the pricing side, average home prices in BC rose 7.8 percent over the previous year to $737,834 despite the dramatic decline in sales. BCREA pointed to the rapidly shrinking supply of active listings — down 23.7 percent over last year — as the primary reason that prices stayed firm through April.
Central 1 Credit Union Deputy Chief Economist Bryan Yu said that monitoring price fluctuations during this volatile period should be done with caution.
“Caution is also warranted as sales in the current environment may reflect a larger number of distressed sales or investor-owned sales, as other homeowners delay their listings until the summer,” wrote Yu in a note published late last week.
Yu explained that he and his team do not expect the current environment to persist, with demand improving as the employment picture gets better. The market’s pace, however, will be slower than activity in the pre-COVID-19 period.
“Economic activity will not revert to previous levels until mid-2021 at the earliest and population growth is likely to slow. Nevertheless, housing demand will rise onward from the summer months and price declines are expected to be mild around 5 per cent before rebounding,” continued Yu.
The economist went on to acknowledge that a second wave of infection or weaker than anticipated economic rebounds pose real risks to this forecast and could spur home price declines of up to 15 percent in the BC market.