Trent npelbe home economics FIGURES from the Greater Vancouver Real Estate Board for the month of January were released last week and they were a bit of a shocker. For four out of five of the hous- ing categories that we follew closely on the North Shore, housing sales were down significantly. The one exception was West Vancouver detached resale homes. As you can see from the accompany- ing graph, January sales were up from December and alse well above fast January's level. But even here there is some reason for concern as you can see thar sales in this market have been trending downwards for the last cight months. On the supply side thing. have tightened up somewhat, with only 336 active listings on the market at the end of January, as compared to 399 last January. Also, average sell- ing price has been on an upward trend for the last year, indicating that there have been more sales of higher priced homes. In fact the average seiling price for West Vaio detached homes in the month of January sas $995 000! All ia all this looks to be a pretty good time for selling a detached home in West Vancouver, Sales of West Vancouver apart: ments Were particularly weak, with only three units fora total of $1] million selling ase month which is about half of what we would expect to see ina typical January. This ts a thin market that exhibits fairly wild swings in sales from month to month so we shouldn't make too nich of the numbers for just one month, However the very low fig: ure for January does rake en some significance in light of the fact that sales are down pretty well all across the Lower Mainjand. The picture is equally bleak for North Vancouver. As you can see from the accompanying graph, total sales of detached resale honves dropped precipitously from December and were 7% below January 1999. What makes this par- ticularly significant is thar last January was a low-water-mark at the time, Despite the weak demand, this is still a reasonably good market for selling a home because there isn’t much competition. At the end of Total Sales West Vancouver Detached TOTAL SALES (M1 Jan-97 Jul-97 Jan-938 Jul-98 Jan-99 Jul-99 Total Sales North Vancouver Detached TOTAL SALES (SM) Jan-$7 Jul-97 Jan-98 Jul-98 Jan-S9 Jul-99 Jan-06 January Where were only 243 active listings, dover 20% fran hast January. The sales story was pretty mach the same for North Van auached homes aud apartments. Sales of attached homes plunged to their lowest level in vears and aparinent sales were also down. However, unlike the situanon with detached homes, there is an ample supply of attached homies and an oversupply of apartments. With weak demand aad plentiful supply we can expect to sce weakening prices for both attached bomes and apartments. How do we explain this disnia January showing for North Shore housing sales? After all most ccono- Fridiey. Fetvuary 11,2000 - NV - North Shore News - 3 nists agsee thatthe BOC. econenty has turned the corner arid 1s on its way te cee wery. Pthink the answer dics with inter est rates. The Royal Bank released its upstated affordability index Last week which measures the percentage of income required to carry a typical detached bungalow in different rewions across the country. For the Vancouver area, the inden rose front 47" 52 8% during 1999. This dicredse Is being driven mainh by interest rates as the five year mort gage rate rose from 6.9% to 8.25% fast year. The bank abo released a that showed that fewer Canadians expect to buy a home in the next two years than did last year. Bad at things are, it looks like they are going to get worse before thev get better. ‘Phe Roval Bank is forecasting that interest rates can be expected to increase 50% to .75% this year which will result ia a fur- thee decline in the affordahiiny of housing. > Ove nienth does nota tend make, but January's dismal sales tig: ures, combined with the prospect of even higher interest rates, suggest thar 200018 going te be a tough year for the local real estate market. — Trent Appelie is a real estate anens and an economic with Re/Max Crest. Realty. He can be reached at Y8X-4797 or by e-mail ar cereni@hones-rancauventont>, Ales x NEWS photo Paul McGrath The Peak of Vancouver NORTH Vancouver ... or a village in the Alps? These townhomes make a pretty picture with the ski runs of Grouse Mountain towering above them.