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Higher mortgage rates keeping some prospective home buyers in the north on the sidelines

Home sales across Northern BC took another tumble in June.

According to data released by the BC Real Estate Association, 443 homes changes hands last month, a year-over-year decline of 19% when compared to the same month in 2021 where 549 sales were made.

Chief Economist, Brendon Ogmundson told Vista Radio higher mortgage rates are keeping some potential buyers on the sidelines.

“Really, the story is interest rates. Five-year-fixed rates are over 5% for the first time in more than a decade and that is just keeping a lot of buyers from entering the market.”

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He added sellers will eventually feel the pinch of these higher rates, setting up an interesting next 12 months.

“Patience is going to be key. It’s going to take longer to sell the price that you thought you were going to get and it’s going to be a little bit lower than it was five or six months ago.”

“We are entering a period where expectations on the part of sellers and buyers is going to have a bit of a gap. So, sellers, tend to be anchored to the highest price they’ve heard about the last six months and buyers tend to update their expectations on prices very quickly.”

Even though sales are down, prices continue to rise in the region, the average price is over 412 thousand dollars, an increase of 8.5% over the past 12 months.

The average residential price in BC was $951,105, a 4.6% decline from the $909,657 tallied in June of 2021.

In addition, the BC Northern Real Estate Board released its second-quarter forecast.

In Prince George, 800 properties worth $366.2 million has changed hands so far this year, compared with 862 properties worth $353.5 million in the first six months of last year.

In the western part of the city, the median price of the 140 single-family homes that have sold was $470,000.

For east of the bypass, the 113 single-family homes that sold had a median price of $412,500.

In the Hart and northern portion of PG, 91 single-family homes sold with a median price of $540,000.

Lastly, the 136 single-family homes that sold in the southwest section (College Heights) recorded a median sale price of $612,250.

“Despite the rates changing, the real estate in the Prince George area remains steady. Sales are continuing to happen and people still need homes to live in. It’s changing a little bit, the type of houses people are looking at for sure,” added Breanne Cote, Director, BC Northern Real Estate Board.

“The lower-priced houses are the ones that are selling faster and at closer to the asking price. Some of the higher-priced properties, some of the more desirable areas, and the high-priced homes that have topped out in the past six months to a year are taking longer to sell and they are selling for a little bit less than the asking price now.”

Overall, Prince George is still holding on the mantra of being a sellers’ market as a single-family home is going for roughly $530,000.

This highlights a jump of nearly $74,000 since June of 2021.

So far this year, 480 single-family homes have exchanged hands, a drop of 86 transactions from the same time last year.

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