Peter Simpson wants to offer reassurance to new Lower Mainland homeowners worried about the shrinking value of their houses.

Don't be dazzled or depressed by price changes. They go down, then they recover and rise over time, he says.

Simpson has seen more than a few housing cycles in his 24 years running Canada's two largest home builders' associations in Vancouver and Toronto.

Simpson, 68, retires Wednesday as CEO of the Greater Vancouver Home Builders' Association, the country's second largest. The Vancouver group's membership has grown to 750 from 250 when he started 19 years ago.

The Vancouver association CEO says it's natural for first-time owners to see the latest real-estate statistics and fret about shifting values.

In his early 20s, Simpson sold his Corvette convertible to help scrape together a $10,000 down payment on a $38,500 house in the Toronto suburb of Scarborough. He was earning $138 a week as a compositor at The Toronto Telegram newspaper.

"I woke up for three nights in a cold sweat wondering what the heck I had done," he says. "It worked out. It always does work out. The sun comes up the next day."

Greater Vancouver home prices will likely fall by an average of 5.9 per cent this year to $734,000, the B.C. Real Estate Association says in its latest forecast. The average price should drop by another 1.9 per cent next year.

In the Fraser Valley, prices are expected to drop 3.1 per cent this year and eke out a 0.2-per-cent increase next year, the association predicts.

Simpson believes people only hurt themselves if they become obsessed with tracking week-by-week house price changes.

"They should not consider their home and its value as a pork belly future," he says. "That causes a lot of people angst.

"Live in it, enjoy it and if you have to move somewhere else, sell it and move on."

If you must worry about something, worry about the resistance from some people to letting their neighbourhoods evolve into a mix of single and multi-family housing, Simpson says.

Densification is the key to providing affordable housing choices as the Vancouver region grows, he says.

"We have to start building more high-density housing along arterials and even up side streets in existing neighbourhoods," he says.

Single-family homeowners who oppose multi-family housing in their neighbourhood should ask themselves two questions, he says: Where will their children live who can't afford their neighbourhood?

And where will aging homeowners go when they can't climb the stairs of their current house but want to continue living nearby?

"People who want to keep their neighbourhoods exactly as they are should be careful what they wish for," he says. "They may not be able to live in their house as long as they anticipate."

Affordability, of course, is a challenge that's not unique to Vancouver. Simpson's youngest daughter, who lives in Toronto, has told him she doesn't expect to ever be able to afford a house there. "That saddens me," he says.

When Simpson says homeowners should be glad they have a roof over their heads he means it.

In a benign irony, this voice of the building sector invests a lot of time serving on committees to help people at the other end of the spectrum - the homeless.

Simpson's younger brother lived on Toronto's streets and in its flop houses for 30 years before his death in 2009.

"It's a huge challenge we all face," he says. "The challenge is not just the homeless but the people who are at risk of homelessness."

By Paul Luke

Let's review the following systems:

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A slowdown in real estate sales numbers in Vancouver, particularly in single-family homes worth more than $1 million, dragged down the country's average home price in September, the Canadian Real Estate Association said Monday.

In Metro Vancouver, the average home price was down 3.8 per cent in September from a year earlier, which CREA said skews the national average price, which was up 1.1 per cent. Excluding Vancouver, the national average price was up 3.4 per cent from a year ago.

Gregory Klump, CREA's chief economist, said the drop in Vancouver was caused by fewer really expensive sales this year compared to last year.

"Last year, the average was pitched higher by a whole bunch of high-priced sales, while this year, those sales haven't recurred, so it's lower." Klump said. "I like to use the following analogy: If you line the kids up in class from shortest to tallest and take the average height, and then you excuse the 10 tallest kids and recalculate the average, then the average height will have shrunk, but none of the kids have."

For this reason, average house prices are not the most consistent information to use, Klump said.

"It's like looking in a funhouse mirror," Klump said. "It doesn't really give you a true picture of what's going on with regard to price, which is why you really want to look at the home price index, which keeps the quality of homes constant over time."

The Multiple Listing Service home price index is down 0.8 per cent to $606,000 in Vancouver year-over-year in September, while it is up 3.9 per cent nationally.

"Stricter high-ratio mortgage regulation further exacerbated a moderating trend in consumer demand," said Cameron Muir, BCREA chief economist. "Reducing the maximum amortization from 30 to 25 years had the equivalent impact to affordability as a 100 basis point increase in mortgage interest rates."

In Metro Vancouver, the dollar volume of sales was down 35.7 per cent in September, year-over-year, figures released Monday by the B.C. Real Estate Association show.

Robyn Adamache, Canada Mortgage and Housing Corporation's senior market analyst for Vancouver, said sales of single-family homes are down 29 per cent for the first nine months of 2012 compared to the same period last year, while townhouse sales are down 20 per cent and apartment sales are down 16 per cent.

Although the overall average home price is down seven per cent, single-family home prices are down five per cent on average, while townhouse prices are down one per cent and apartment prices are down three per cent. Because more apartments and fewer houses are selling this year, the decline in average price is larger than the drop in price for any particular property.

Adamache also said there is a shift in sales volume away from very expensive single-family homes in areas such as the west side of Vancouver, West Vancouver and Richmond and toward more affordable homes in places such as Maple Ridge.

Adamache said sales numbers are expected to remain flat until the middle of 2013, when they are expected to increase, not to the lofty levels seen in 2011, but approaching those levels. She said prices are expected to decline overall this year, with a smaller decline next year.

Muir also said demand is expected to be on the rise.

"An expanding population, strong full-time employment growth and persistent low mortgage interest rates are expected to bolster housing demand in the months ahead," Muir said.

Sales volume numbers are a lot more volatile than prices, Klump said.

"If you're not forced to sell at a price you're not willing to accept, you don't sell," Klump said. "If you're getting offers below what you're prepared to sell for, you take it off the market."

Nationally, home sales in September fell 15.1 per cent from a year ago, CREA reported, adding that sales in September were up 2.5 per cent from August - the first month-to-month gain since March.

"While some first-time homebuyers may no longer qualify for mortgage financing under the new rules, it is likely that many others are stepping back and reassessing how much house they can realistically afford, which is one of the things new mortgage rules were designed to do," Klump said.

While Vancouver's home price index was down slightly, Calgary had a 6.5-per-cent increase in the index, the Toronto area was up 5.7 per cent, the Montreal area was up 2.2 per cent and the Fraser Valley was up 2.1 per cent.

Regina had the biggest increase among markets measured by the HPI, with a gain of 14.2 per cent from September 2011.

TD Bank economist Francis Fong said the month-over-month gain only partly offset August's drop, with sales off their peaks in most markets across the country.

"The Canadian housing market has clearly lost some of its lustre," Fong wrote in a note to clients.

"That being said, with interest rates remaining sufficiently accommodative, we do not anticipate any precipitous decline in housing activity in the near term. Rather, we expect a gradual unwinding of the imbalance in both sales and prices over the next few years."

The sales report came as the Conference Board of Canada said that most Canadian cities are facing lower housing starts in the coming years as markets slow, with only 10 of the 28 cities showing positive long-term expectations.

Construction is going strong in Metro Vancouver, with housing starts on pace in September to reach 20,000 units by year's end, mostly driven by multifamily developments, Canada Mortgage and Housing Corporation reported last week.

CREA said Monday there was still a balance between the number of homes for sale and the number of buyers in September, but conditions have eased.

The national sales-to-new listings ratio, a measure of market balance, stood at 49 per cent in September 2012, remaining near the midpoint of a balanced market.

With a file from The Canadian Press tsherlock@vancouversun.com Blog: vancouversun.com/yourmoney

If you could do it all over again, what would you do differently? Most people spend more on their homes than they will on anything else. Experts share strategies on how to avoid costly mistakes and offer suggestions for how to end up with the house of your dreams.

FINANCING

A poll conducted for TD Canada Trust found many homebuyers admit-ted to making rookie mistakes when they bought their first home.

These are the top three things new homeowners would change if they could do it again.

. Make a bigger down payment (61 per cent): "Buying a home is the biggest investment most people will ever make, so it's important to save a sizable down payment and prove to yourself that you are ready to take on the responsibility of a mortgage," says Farhaneh Haque, director of mortgage advice for TD Canada Trust.

. Be more thorough when budgeting (54 per cent): Haque says home-owners should factor in expenses like property tax, insurance, repairs and utilities in addition to the monthly mortgage payments.

. Buy a home sooner (61 per cent): ?"I'm not surprised that even after becoming homeowners, people are split about whether their timing was right," Haque says.

BUYING AND SELLING

The majority of people generally purchase more than one home in their life-time. Each time they do, they incur a variety of costs, including real estate commission fees for the seller, mortgage fees for the buyer and a fee to break a mortgage (if applicable) for the seller.

Nicole Burgess, a six-year veteran with Pemberton Holmes, says people typically sell when their home no longer meets their needs.

To ensure you can sell your home when you need to, it's important to buy a house that appeals to a larger market. The real estate adage of location, location, location also applies, she says.

RENOVATIONS

While some people will buy a new property to get the features they desire, a less expensive way is to renovate an existing house over time.

Steve Copp, president of Steve Copp Construction says, "Half of our business comes from homeowners renovating and upgrading their homes. Some spread out their renovation projects over a span of two to three years, with us returning to work on one room at a time."