For years, the real estate market in B.C.'s Lower Mainland acted a lot like the mythical perpetual motion machine.
Buyers were jumping into the market because prices were rising and, hey, why miss out on the capital-gains fun? So sales jumped, and bidding wars ensued, sending prices a little further up into the stratosphere – and luring more buyers into the market. The mere fact that prices were rising far above historical rates, and well beyond any rational measure of affordability, was of no consequence.
Of no consequence, that is, until last summer, when prices started to edge downward, and the wheels of the great B.C. perpetual motion machine stopped spinning. A tiny drop in average prices – 2.3 per cent between May and August – coincided with an enormous drop in volume. The drop in the volume of sales accelerated through the winter.
