VICTORIA -- Real estate sales are down in the provincial capital. The number of sales and the total value are lower, and the real estate industry is seeing signs that Victoria's housing boom is over.

"We are definitely seeing a shift in the marketplace, although it's certainly not a time for panic," said Victoria Real Estate Board president Tony Joe. "For people hoping home values will be plummeting any time in the future, I don't think that's going to be happening any time soon."

Joe said the market has been cool so far in 2008, but that's in comparison to 2007, an "exceptionally busy year when we exceeded all the numbers."

"We're also looking over the last five or six years and what we're finding is things are just coming back to normal," he said.

According to Landcor Data's first-quarter residential home sales summary, the economic malaise in the U.S. fuelled by the sub-prime mortgage crisis is having an effect on B.C. and Vancouver Island.

The Island, Fraser Valley and northern B.C. have all seen the total value of sales in the first quarter drop compared with the first quarter of 2007, the first time all three regions have seen a quarterly decrease in the past four years.

"The cooling-off period is not unique to this region, and not to the province of B.C. The North American economy as a whole has seen a dramatic change in market value in the past year," said Landcor president Rudy Nielsen. "It not only affected the housing prices in certain American markets, but it has been trickling into the demand for homes, the job market and commodity markets around the globe over the past year."

Over the first quarter of this year there were 4,661 sales of homes on the Island, a drop of 11 per cent, while the total value of those sales dropped 1.95 per cent to $1.7 billion.

Provincially there were 26,860 home sales in the first quarter, down 11.8 per cent from the first quarter of 2007, although total value was up 5.6 per cent to $11.69 billion.

"Speculation, both from investors and home owners expecting a major financial payoff, makes housing more volatile than other economic sectors," said Nielsen. "Recently, consumer confidence has dwindled, causing the market to correct. This is the normal real estate cycle and this is what we're seeing throughout B.C."