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Will Victoria homes drop in value in 2012?

According to Christine Dobby  in her Dec 19, 2011 FP article we can expect to see a 5% to 10% drop in home prices during the first half of 2012. This is coming from predictions made by economists at Bank of America Merrill Lynch.

It's hard not to get really depressed with all the doom and gloom prophecy that we get bombarded with on a regular basis. CMHC is warning Canadians about the rising household debt, the EU is in crisis, the US economy continues to move at a snails pace, and reports of 73,000 jobs lost in Canada over the last 2 months. Happy New Year!

I am no economist but as a REALTOR® in Victoria  I keep an eye on the market. There have been many predictions of large corrections since 2008 and if you look at the average home price in the Greater Victoria area since 2009 you find that prices have not changed all that much. Of course you have the varied products that have been effected more or less depending on inventory, location, and type of product such as the Condo market or the less desirable areas in town that have seen larger corrections. In the end the Victoria home prices have gone through a bit of a roller coaster to end up on average 6% higher in Nov. 2011 as compared to Nov. 2010. Annual averages have dropped slightly but in 2010 the median single family home in Victoria was $545,000. Median price in Nov. 2011 was $530,000.

The market has slowed for sure and it is increasingly becoming more and more important to consult an expert in the market and area you are considering purchasing or selling property in. Homes that are in desirable locations and have considerable value either current or latent are still selling quickly and for top dollar. The Victoria market is considered a luxury market so if you are considering selling your home make sure you consult a REALTOR® and staging expert to prepare your home for sale in this competitive environment.

Above is a link to the Financial Post article. If the prediction is accurate I place my bets on Victoria being a market that experiences little or possibly none of this correction.