Economic uncertainty, a glut of real estate listings and the newly-implemented harmonized sales tax (HST) dramatically slowed real estate activity on the Sunshine Coast in July relative to the same month last year, according to local realtors.
In July, 43 detached homes sold on the Sunshine Coast compared to 69 in July 2009, and 105 new detached properties were listed compared to 124 a year ago, according to statistics provided by the Real Estate Board of Greater Vancouver (REBGV).
Local RE/MAX Oceanview Realty realtor Alan Stewart, who works with a team called Sunshine Coast Homes, called July's real estate activity on the Coast "abysmal," but noted that the year-to-date figures are still ahead of last year, though down from 2008.
Stewart said a key factor slowing real estate activity in July has been a glut of new listings coming on in the past few months.
"We like to think of a balanced market being in and around 500 listings on the market for houses, and we've got about 630 some odd now the market. So we're 20 or 25 per cent too many on the market," he said.
The result, he said, is a buyers' market, where buyers are feeling no impetus to close deals quickly, and sellers are getting frustrated with some "pretty stinky" offers.
"I think we're going to see more and more houses come off the market because [sellers] are frustrated with the offers that are coming in," he said, adding, given the market, sellers may want to hold off on listing their properties unless they're very motivated to sell.
Kenan MacKenzie, an associate broker with Prudential Sussex Realty, called the HST "a big factor," behind the July slowdown.
"People don't understand how the tax is going to affect them," he said, noting that some people thought it would apply to all homes, when in fact it doesn't apply to re-sale properties.
Both Stewart and MacKenzie noted that economic uncertainty appears to be slowing local sales activity.
"People are still wondering if it's going to get cheaper," Stewart said. But he added that a recent surge of multi-million dollar sales in Roberts Creek, Pender Harbour and Halfmoon Bay suggest to him that "the smart money is starting to buy again." Realtors, he said, are also starting to buy again for themselves.
"I think the savvy investors know that [market bottom] is coming and we're down toward the bottom of the trough now," he said. "That's our expectations but who knows, I don't have a crystal ball."
