St. John's Real Estate Prediction for 2009

We are into the third week of January and the most common real estate question I am being asked is "where will the housing prices be in 2009?" As in most years, it’s difficult to predict. Last year CHMC predicted 6% and RE/MAX stated at least 12%. I remember saying after the first quarter we’ll see much higher then 12%. The final tally for 2008 is not yet in but should be close to 23% in my opinion. Now….where do I see the St. John’s real estate market for 2009. Currently my mind is set at a 5% increase from 2008. How can I say this with the US housing market expecting to drop even more, Canadian markets are predicted to lower in some areas, and the UK, no real direct relation, but the world housing market seems to be taking a hit right now. It all boils down to consumer confidence, the provincial economy and a balanced market. All three we are seeing in Newfoundland currently. There are still a lot of "sale pending" left over from 2008 that will help keep the numbers up for unit sales in 2009, but there is clear evidence that it’s no longer a seller’s market. With mortgage rates still at VERY low levels, as well as increased inventory in new construction and pre-existing homes, this will leave more choices for buyers. Personally I do not see the market going into the negative numbers, but I do see houses sitting longer on the market and “price reduced” signs being more familiar then “sold signs”.