Vancouver Island

December real estate sales in Vancouver soared, far outpacing activity from a year ago. Transactions were well ahead of December 2008’s total of 924, a number that represented half of the total sales for December 2007. Starting at a meager 724 transactions in the city of Vancouver during January, sales doubled in February, then jumped to 4,259 homes selling in June. Transactions continued at much-improved levels throughout the balance of 2009.Per Cameron Muir, British Columbia Real Estate Association chief economist, the housing market experienced great volatility. He commented that January 2009 sales were at lows not witnessed since during the 1980s, yet fall sales rebounded to almost-record levels.One reason for the January sales slump was the onset of severe job cuts. B.C. experienced a loss of 35,000 positions during that month, per Statistics Canada. With the real estate slowdown came the elimination of construction-related jobs. Soon after, the Bank of Canada issued a dramatic cut in interest rates to a level not witnessed since the 1950s. The duo of highly attractive interest rates and low home prices generated a wave of purchasing, particularly among people who had put off buying homes in the latter part of 2008.According to Helmut Pastrick, who is the chief economist of Central 1 Credit Union, home sales increased in tandem with the sharp decrease in interest rates. He noted that in previous recessions, the real estate market is historically the first economic sector to experience recovery. Pastrick also commented that when interest rates ultimately increase, demand will slow considerably, and real estate professionals should be prepared for the consequences.