Shifts in the BC real estate market may affect the success of interactions between home buyers and home sellers. This is confirmed by the British Columbia Real Estate Association (BCREA). Residential sales have declined somewhat from the record highs seen in 2021. They are expected to fall further in 2023, perhaps by as much as 11%. However, real estate litigation specialist, Arsen Krekovic of Vancouver’s Hoogbruin & Company continues to serve both buyers and sellers, active and involved in both residential and commercial transactions in the BC real estate market. As this wave of stress passes through the dynamic real estate market it is important to have experienced litigation counsel to advise on disputes, review contracts and protect both rights and investments as they arise.
What factors impact the current real estate market in BC?
Interest rates are the highest the real estate market has seen since 2007 and yet activity in the market is anticipated to fall to a new, low level.
It is unusual, given the electric energy home buyers and sellers have experienced for years in the BC real estate market. Yet, a decline of at least 5% from the market peak earlier in the year is forecast. It should be no surprise between the interest rate situation and the high cost of living in our admittedly beautiful and desirable province.
Are specific real estate markets forecast to decline in 2023?
Arsen Krekovic has resolved issues for buyers, sellers and contractors throughout BC as an experienced real estate litigation specialist. Some of the geographic areas thought to be most heavily impacted if the decline in residential property prices occurs are:
- Greater Vancouver about 5.2%
- Fraser Valley a decline of about 7.8%
- Chilliwack estimated at 6.2%
Slightly less may be seen in Victoria at 4.3% and an expected decline in prices in the real estate market in the Okanagan of 4.9%.
Is the real estate market decline driven by any trends?
For other causes clients may experience major housing market shifts that affect their ability to do business, the firm has observed some social factors.
First the advantage home buyers and home sellers experienced around that market high of 2021: COVID-19 altered the residential landscape as super low mortgage rates enabled people to invest more easily in the residential housing market.
Activity was tied to the pandemic in that employees were able to either choose or to be required to work remotely for various periods of time. This stimulated the search for homes that offered more functionality to families and individuals.
Home buyers were looking for more space to live, to work and in some cases, to hold in-home learning for students of all ages.
With the settling down of pandemic adjustments, consumer desires now affect the housing market. People now must or want to return to in-person work, socializing and education. A decline may occur in real estate activity in markets outside of major centres as employers require a return to the workplace.
Those higher mortgage rates have dampened buyer preferences. Larger or more expensive spaces no longer have the same draw thus reducing demand.
Strains in the market felt by home sellers, buyers and contractors will be felt in BC’s real estate market. Competitive buying puts rushed buyers at risk. Sellers risk contracts falling through and the new cooling off period activated this month has yet to show its impact.
The current state of housing will be inevitably followed by a cycle of housing recovery. Stakeholders in the real estate market will raise activity levels to invest in below-market value properties. Yet to be seen issues and disputes will require expertise in review and resolution as the market activity rises.
Be informed. Hoogbruin & Company protects your rights, investment and future home or investment purchases and sales transactions.