The British Columbia Real Estate Association (BCREA) released its Housing Forecast Update for the first quarter of 2010 today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 6 per cent from 85,028 units in 2009 to 90,100 units this year, before declining 3 per cent to 87,500 units in 2011. Higher home prices and rising mortgage interest rates will provide a constraint on home sales next year.

“BC MLS® residential sales sprinted from an annualized rate of 50,000 units during the first quarter to 112,000 units during the fourth quarter last year,” said Cameron Muir, BCREA Chief Economist. “That gold medal finish will give way to a silver medal performance in 2010.”   

Relatively slow economic growth, waning pent-up demand and rising carrying costs are expected to keep home sales from continuing at their frenetic pace.

While home sales in Victoria, Vancouver and the Fraser Valley rebounded sharply last year and weighted heavily in the provincial total, the rest of the province is demonstrating more gradual improvement.

The average annual MLS® residential price in BC is forecast to increase 5 per cent to $490,900 this year and then rise by 1 per cent to $494,800 in 2011. “Higher mortgage interest rates will limit price appreciation next year,” added Muir.