So much for the rosy expectations of the Industry the last few weeks.
Province-wide, the forecast calls for a 43-per-cent decline in housing starts compared with 2008. It estimates that builders will start work on 19,725 new housing units this year, with a 10-per-cent uptick to 21,000 new units in 2010 -- a far cry from the 34,321 built in 2008.
On home resales, the federal housing agency expects 2009 MLS-recorded sales to fall almost 16 per cent to 58,100 units before climbing again to 67,750 in 2010. Average prices are expected to hit $403,700 this year, an 11-per-cent dip, and increase a marginal 0.7 per cent in 2010.
In Metro Vancouver, the expectation is for housing starts to decline almost 44 per cent to 11,000 new units in 2009, then edge up slightly to 11,500 in 2010.
Metro housing resales are expected to drop almost 13 per cent this year to 22,000 transactions, then rise almost 14 per cent to 25,000 in 2010. Metro prices are expected to sink 13 per cent to $516,000 in 2009 and a further 2.3 per cent to $504,000 in 2010.
Meanwhile Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.'s Sauder School of Business, believes there are a lot of mixed signals in the economic data. "Canadian housing sales are up, but U.S. housing starts are down," Somerville said in an interview. "Stock markets are up, but retail sales are down. There are lots of different things [going on]."
Somerville added Canada's mortgage rates, currently at extremely low levels, also throw a wrench into forecasts. He said one model used to calculate home values suggests that, with mortgage rates where they are, "housing is affordable in Vancouver, and prices could rise." But with B.C.'s weaker economic conditions, he doesn't believe that will happen.
Economic forecasting, Somerville said, works better when conditions are in some kind of equilibrium, and doesn't do as well trying to figure out when things will change.
"Right now you're trying to figure out when a complex world economy is [going to turn] around, how fast it's turning around, and where it's turning around," he added. "It's just a very, very difficult environment to turn around."
In his most recent quarterly report, Rudy Nielsen, president of the research firm Landcor Data Corp., noted that the recent trend of rising sales over the past few months could be signalling that the downturn is near its bottom and represents "a light at the end of the tunnel."
Or, Nielsen said, the blip in sales "could be a grizzly bear with a flashlight. It's tough to guess right now where the hell we're heading."
I guess that's 'data-speak' for sitting on the fence.
In the end it's all about the economy, both in Canada and the United States.
Are the fundamentals there for recovery? Or are the 'green shoots' actually the yellow weeds of a bear market trap?
You all know my thoughts on that one.