A couple of economic bad news stories posted by Via on this weekends Friday Free-for-all post: The spring selling season so far has us looking at a very different market from previous years. Sales have dropped and inventory has risen dramatically, at the beginning of June we’re looking at close to 18,000 listings for sale in Vancouver. As it becomes harder to sell the number of foreclosures have doubled in the lower mainland:
Kap Hiroti, who tracks Lower Mainland foreclosures at ForeclosureList.ca, says foreclosures stand at 20 per week, up from 10 per week in 2006.
“For one reason or another, they didn’t pay the mortgage, or insurance, or property tax,” says Hiroti, who advises real estate owners looking to foreclose or prospective buyers looking to buy a foreclosed property. “Or they get behind in their strata or condo fees, or face a one-time cost such as a roof or a leaky condo, which might set them back 40, 50 or 60 thousand dollars.”
Hiroti believes the Lower Mainland real-estate market has “flatlined,” meaning investors who were counting on making a profit no longer see an upside.
As a result, some have chosen to lose their investments through foreclosure rather than hanging on with no sign of a significant upside return.
“They were kind of speculating that the market would go up, but when the market flatlines, some people just choose to get out. Local people are getting priced out of the market.”
At the same time BCs unemployment rate has been creeping up – the jobless rate is now at 4.5% as positions are lost in trade, transportation and agriculture. The unemployment rate is particularly high for young people at 8.8% and for recent immigrants with an unemployment rate of 9.8%.
The bright point in the jobs data remains construction which has been the key driver in the BC jobs market for the last 5 years. The question is: how long can you have a jobs market driven by construction?