It began in the tank, but by the end of 2009 the Kootenay real estate market was thriving again according to the year-end summary issued by the Kootenay Real Estate Board.

At the beginning of the year, things couldn’t have looked much bleaker with first-quarter MLS (Multiple Listing Service) sales the second lowest in the 21 years the Board has been keeping statistics and the second quarter the lowest ever.

But the market began to turn for the better in the third quarter of the year with the 13th highest sales total since 1989 and by the fourth quarter the market was positively smoking with sales climbing to the fourth highest in the last 21 years.

The MLS dollar volume processed by the Kootenay Real Estate Board in 2009 added up to $640 million, a drop of 17 per cent from 2008 but a lot better than many expected at the start of the year. Actual unit sales in 2009 were also down 13 per cent from 2008 levels but still better than expected

The average price of a residential, detached home in the Kootenays in 2009 was $291,561, down eight per cent from the average price of $316,600 reported in 2008. In Cranbrook, the average detached residential home sold for $289,752 in 2009 compared to $320,164 in 2008, a decrease of nine per cent. In Kimberley, the average detached residential home price in 2009 was $249,344 compared to $272,123 in 2008, a decrease of eight per cent.

Jim Barber, president of the Kootenay Real Estate Board, said the year started out gloomy but he could sense things changing mid-year. “When I watch these things, I look for a little signal out there and it was mid year, or a little prior to that, when the TD Bank and the Royal Bank economists both came out saying the recession was over.”

It wasn’t long before the bankers’ pronouncements began to be felt even in far-off Cranbrook and the market began to bubble, Barber said. “The market began to pick up. What buyers were picking up on is they saw an end to the total downside of the market. Not just the real estate market, but all markets in the country.”

If present trends continue and interest rates remain low, the real estate outlook for the first half of 2010 looks good, However, the advent of the HST (Harmonized Sales Tax) and higher interest rates expected by July, could change the picture, Barber said.

“We expect markets to be active. Interest rates are certainly going to be a deciding factor. The Bank of Canada has clearly stated they’re going to hold the overnight rate until June, but after that I believe the message from the Bank of Canada is that interest rates are going to start to go up.

“As interest rates start to move up, mortgage rates will move up and what it may do is create a flurry of sales in the first six months, but sales in the last six months may tail off a bit.”

But overall, it should be a “reasonably good year” for the real estate market, he said. ““Generally, I’m cautiously optimistic about Kootenay real estate markets in 2010. Our provincial and national real estate association economists are indicating we are out of the “technical recession” and they are predicting an increase in the number of MLS® Unit Sales across the province.”

Kootenay Real Estate Board Executive Officer Ian Mason said it’s a good time for prospective buyers to get back into the market because a study by the BC Real Estate Board shows houses in 2009 were 30 per cent more “affordable” than they were in 2008.

Houses are especially affordable on the lower end of the market which is good for first-time buyers, he said. The Cranbrook and Kimberley markets are heavily influenced by Alberta and Albertans are in a buying mood again, he said. The higher end of the market didn’t fare well in 2009 and the demand for recreational housing basically “evaporated,” he said.

Kootenay Real Estate Board statistics for 2009 show the most expensive average prices for single, detached homes in the East Kootenay are in Invermere at $387,071 followed by Fernie at $385,694, Radium at $319,156 and Golden at $309,507.

In the West Kootenay, the most expensive prices for detached houses in 2009 were in Nelson at $340,117, Rossland $262,973 Castlegar $261,617 and Nakusp $249,000.

Inventories of detached homes for sale in Cranbrook and Kimberley remain low with Cranbrook currently having around 95 and Kimberley 88. But Barber said the Cranbrook figure should climb to the 160 to 170 mark by mid-year.