A slight drop in B.C.'s year-over-year housing sales in 2011 won't stop median prices from rising 6.8% to $417,000 this year, according to a Central 1 forecast released this morning.
Central 1 is predicting total home sales will slip just under 1% year over year to 88,200 units this year. The credit union trade association is forecasting that resale home transactions will be up 4.7% in 2011 while new home transactions will lag by 26%.
Next year's total home sales, according to the forecast, will increase 3.4%, driven by higher new home sales, while resales of existing homes will decline.
However, Central 1's report noted that home sales are unlikely to drop dramatically because mortgage rates remain at record lows.
The report noted that some homebuyers will delay purchases until 2013 when the province returns to a PST/GST regime from HST.
"People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12% hit they face," Central 1 economist Bryan Yu said in a press release.
Yu added that concerns about a possible dramatic price drop in Vancouver are overblown.
"Our research shows few signs that speculators are overly active in the Vancouver market, which means we are unlikely to see a speculation-induced bust," he said.
"As well, price jumps that have received media attention have been in localized areas and we have not seen a region-wide price surge."