It is generally accepted that inVancouver, a balanced market involves having approximately 15,000 homes listed on MLS.  This provides buyers with options without resulting in a glut of available housing on the market.  In September 2008, listings topped out at just under 20,000 and we all know what happened there.  Buyers, paralyzed by an abundance of options and worried about the teetering economy, became incapable of completing a purchase. Sellers, discouraged and unable to sell, began to remove their homes from the market. But by July of 2009, the listing count had dropped below 13,000 and the market was in an absolute frenzy!  The dwindling supply instilled a fear of missed opportunity forcing buyers off of the sidelines and into the market.  This resulted in record sales volumes and a spike in home prices.  Many buyers went as far as completing a deal without even having the opportunity to commission a home inspection. Enough said.

Market psychology is fascinating and the beginning of 2011 is a great example of this.  Low listings at the beginning of the year lead to record and near record sales for the first 3 months. Prices rose and sales volumes were around 20% higher than the 10 year average.  Encouraged by these numbers, sellers hit the market with a drastic rise in listings. Due to the now abundant selection of homes at their disposal, buyers no longer felt any pressure to make an offer on the first home they saw and sales slowed. For the next 3 months, sales volumes remained at or just below the 10 year average.  When the listing count reached 16,000 (or above the equilibrium point), sales dropped to about 85% of the 10 year average and a small dip in housing prices was observed.

It appears to me that we are heading for another period of low listings and competition among buyers for the available product.  It hasn’t arrived yet and probably won’t be obvious until March or April but if you are in the market for a home, you could do a lot worse than buying that place you’ve had your eye on for the last couple of months.

I’ve been wrong before and I’ll be wrong again… This is just the way I see things. JR.

What I find interesting about this projection is the rationale.  The report isn’t full of conventional wisdom or hyperbole about how Metro Vancouver real estate isn’t affordable but is based on a very simple and easy to understand concept.  Our population is going to grow.  This isn’t a news flash.  It has been growing steadily for the past two decades and will continue to do so. What does this mean for the real estate market you might ask? It means that the demand for housing is going to continue to grow and someone is going to have to fill it.

Every year in Metro Vancouver, the natural population is set to increase by 5,000 people and an additional 35,000 choose to make the move and call it their home. Today, the average household size in Vancouver is just over 2 people per home, meaning that we need to build almost 20,000 housing units per year to fulfill this increase in demand.  The problem is that we just haven’t been doing that:  Only 8,339 homes were built in 2009, 15,217 in 2010 and this year, we are on track for around 18,000. Similarly, the 10 year trend reveals that we have been averaging just over 15,000 new homes per year.  It doesn’t take an award winning economist to figure out that when the demand exceeds the supply, prices rise.

This may seem like a very simplistic argument and I agree that it is.  There are a great number of other factors that impact housing prices.  Affordability, employment, cost of land, labour and materials, government regulations and levies.  Each of these will be a topic of future posts, but today I thought that I would kick things off with the basics.

On Friday, Metro Vancouver mayors voted in favour of a transit plan that includes expanded services and the Evergreen Line. Provincial Transport and Infrastructure Minister Blair Lekstrom has confirmed his government will “get shovels into the ground” within weeks or months.

The vote to raise regional gas taxes by two cents, passed with 70-per-cent support. The provincial government is committing $583 million to funding the Evergreen Line. Translink will provide $400 million and the federal government will contribute $417 million.

So what exactly are the direct impacts of transportation improvements on real estate? In it’s simplest answer, accessibility drives real estate prices.

Current examples closer to home is the recent rejuvenation of the Cambie Corridor and the Cambie Village area. Since the Canada Line opened, real estate prices in these areas have soared. Developable land has become extremely scarce, driving prices higher and higher. Going back in time, the same impact was felt when the Alex Fraser Bridge opened.

With gas prices rising globally, there has become a greater demand for public transport. Commute time, commute costs, and accessibility, are now critical determinants for potential homebuyers. As Campbell and Tennant, authors of “The Gateway Effect” explain, residents now measure their commute distance in minutes not kilometres. This is a process that leads to higher demand for properties that are located farther from their jobs, yet closer in terms of commute time.

Positive Impacts of Light Rail On Residential Property Prices, Housing Value & Rent:

• In studies conducted across North America, the values of homes in neighbourhoods close to mass transit had premiums of up to 40%

• The positive effects of proximity to rail transit, is limited to homes located within a one-half mile (800 metres) radius of stations. *Note Bloom’s prime location, which is a 300 metres from the future Burquitlam Station.

• The closer a home is located to rail stations has been found to increase rent prices, and increase the resale value.

• Studies have found that rent decreased by approximately 2.5% for every one-tenth of a mile (160 metres) distance from the station. *Again, note Bloom’s prime location, which is a 300 metres from the future Burquitlam Station.

Check it out, Bloom was featured in the Vancouver Sun! Click here to view the article.

Our Grand Opening was your first opportunity to see all that Bloom has to offer. The overall response was extremely positive, and people were excited to learn more about Bloom and the surrounding community.

Spacious layouts, the parkside location and the quiet cul-de-sac are just a few of the reasons our buyers are loving Bloom.  Bloom is just a leisurely stroll from major transit routes, amenities and shopping. With the completion of the New Evergreen line just a few years away, this new rapid transit line will connect Coquitlam to Vancouver via Port Moody and Burnaby. Bloom is located only 300 metres away from the proposed Evergreen line station, where residents in this burgeoning community will experience accessibility and convenience first hand.

Like a tiny seed that grows into an apple tree, a home at Bloom is part of something much bigger. It’s a chance to establish roots in a community on the verge of blossoming. This is a neighbourhood that promises to bear fruit for years to come.

Our 1, 2 & 3 bedroom homes are affordably priced from the mid-$200,000′s. We are excited to announce that our 10 suite special incentive release sold out. Due to the success of this weekend, Springbank has agreed to apply this incentive to another 5 suites!

Our Sales Centre is open everyday, except Friday’s from 12 – 5pm.

Location: 530 – 526 Clarke Road, Coquitlam (Next to Shoppers Drug Mart)

For more information, please email info@liveatbloom.com or call   604.939.8808

Bloom’s official Grand Opening is this Saturday, Sept. 24th. We are excited to invite you to come and celebrate with us.