BC Home Prices Reach Average of $505,178 in 2010

VANCOUVER - The average price for a home in British Columbia reached a record high of $505,178 in 2010, the B.C. Real Estate Association says.

Home sales fell 12 per cent last year to 74,640.

Be nice if they also gave us the median.

All markets have segments and an average is a melange of market segments piled together and skewed upward (given that it is zero-bound) but let's see what the multiplier works out to.

BC household income averaged $67,890 in 2008. Assume a similar increase as the last two years, that would bring us to an approximation of $72,000 for 2010, or a multiplier of 7x. For the record, the U.S. crashed at a multiplier of 6.4x 4.9x (edit: I just recomputed the multiple (median price against median household income) from April 2006 and it was 4.9x).

Other tidbits: The BC 2009 per capita personal income was $35,196. The personal savings rate was -3.7% in 2008 and -4% in 2009 (compared to Canada as a whole, which was positive 3.6% and 4.6% respectively). According to Personal Income and Saving Rate by Province/Territory, 2008 and 2009 and Median total income, by family type, by province and territory.

Note also that adjusted personal income declined in BC between 2008 and 2009. And has been pretty much flat since 2006.

What can we conclude? That BC is more than likely using increasing debt to hold up their lifestyle/just get by in the face of increased cost of housing.

A booming housing market is not a positive. It should be a warning that incentives are out of whack. Left unaddressed by policymakers, it will leave a generation indebted.