There are three terminologies that I personally use to describe what is going on in the real estate market in the Interior of British Columbia. They are: “a leveling off”, “a recovery”, and “a correction”. In the last two years we’ve gone from a recovering real estate market (Rising) to a leveling off and we are now in a correcting market. The characteristics of a correcting market are; reducing absorption (less properties sold in a said period of time), reducing sales, reducing prices with rising inventory, and rising days on the market to sell. That is exactly what we are experiencing right now. These five activities are happening all over British Columbia and likely throughout the rest of Canada or at least in most locations in Canada to various different degrees. The reason is that the major driving force pushing the market down is rising interest rates. Interest rates are governed federally.
My prediction in the market going forward is that we will likely have 9 or 10 months of a correcting market. In the third and fourth quarters of 2024 the correcting market will likely start to level off. This will be spurred by the Bank of Canada starting to inch the interest rates down as inflation gets more under control. The correction will not be a dramatic drop in prices. We will likely see a moderate drop in prices. Perhaps a further 10%. The reasoning behind this assumption is that immigration is maintaining a relatively high demand and low inventory is maintaining a relatively low supply. This is why we have not seen a huge drop in prices so far.
There are quite a few assumptions built into my prediction that may or may not come true. For instance, if the Bank of Canada continues to raise interest rates the correction will pick up speed and will last for an extended period of time. I see this ending in the last two quarters of 2024.
We have had quite a few years of robust markets. British Columbia has the highest Real Estate prices of any province or State in North America. We recently passed Hawaii.
Some of you may disagree with me or even dislike me for saying it but,”We needed a correction”.
As always, this is just the real estate world according to Rom. I hope you are having an amazing Fall!
