The British Columbia Real Estate Association (BCREA) has released its 2020 Second Quarter Forecast. According to the release, a 21% decline in Multiple Listing Service® (MLS®) residential sales to approximately 61,000 units this year, after recording 77,347 residential sales in 2019. MLS® residential sales are forecast to increase by 45.3% to 88,500 units in 2021.
"The bright outlook for 2020 home sales has been upended by the COVID-19 pandemic and resulting recession," said Brendon Ogmundson, BCREA Chief Economist. "However, as the economy "re-opens" and measures to mitigate the spread of COVID-19 are gradually eased, we expect home sales will start to rebound, aided by record-low mortgage rates and pent-up demand."
The impact of the current pandemic and associated recession on prices is largely determined by the reaction of supply. The supply of listings for sale has declined for at least the first few months of the pandemic, given the unusual nature of Covid-19. A muted rise in for-sale inventory may translate to home prices remaining relatively firm in 2020. We are forecasting the provincial MLS® average price to finish the year up 1.8% and to increase a further 5.6% in 2021.