COVID-19 couldn't have come at a worse time for many B.C. real estate agents.
The housing market was just emerging from a lengthy slowdown when the World Heath Organization declared a pandemic on March 11.
In a four-page report released this morning, the B.C. Real Estate Association has forecast an "initial sharp decline" in home sales as households and people in the industry adhere to social distancing.
"As measures implemented to mitigate the spread of COVID-19 are gradually lifted, we expect that low interest rates and pent-up demand will translate to a significant recovery in home sales and prices," the report states.
The BCREA notes that three major recessions since 1980 lasted between eight and 25 months, accompanied by an average economic contraction of about four percent and a rise in unemployment of 4.5 percent.
The worst slowdown occurred in 1981 and 1982, when the B.C. economy contracted by 6.4 percent and the jobless rate jumped by nearly 10 percent.
The BCREA estimates that in 2008-09, the B.C. economy shrank by 3.7 percent over 12 months as the unemployment rate increased by more than four percentage points.
The recession of 1990 to 1992 was the longest, lasting 25 months, but its effects were milder in B.C., with unemployment only rising by 3.1 percent.
"The COVID-19 recession is unique in that it is not man-made," the BCREA states. "It did not evolve due to collective poor business decisions, bad loans, or misadventures in financial engineering. Rather, the economy has been purposely halted for the greater good."
As a result, the BCREA expects demand for housing to return to pre-COVID-19 levels, "with home sales and prices recovering into 2021".More