Market Insights - BC Waterfront Real Estate

A couple of weeks ago, I had the pleasure of interviewing our long-time client and Sproat Lake real estate expert Dave Koszegi in our first "live" Hangout on Air. The interview is a very in-depth look at lakefront property on Sproat Lake, Vancouver Island. Dave and I really got into the details of the market including discussing different neighbourhoods on the lake, boat access only cabins, recreation, average prices and the current market for real estate on Sproat.

I have embedded the full-length video interview below with direct links to different chapters so that you can skip to your areas of interest. 

For those of you who prefer to quickly read the details, I have included a synopsis of the pivotal parts of the interview in the blog below. Here you can also find detailed real estate sales statistics for lakefront properties on Sproat and links to Dave's current lakefront "deals" on our site. Update Aug. 2015: Attached deals are no longer valid as the original post was created in 2013.

About Sproat

First off, here's a little information about Sproat Lake. Sproat is located 13 km northwest of the city of Port Alberni (population approx. 17, 000), which is located in the south-central heart of Vancouver Island mid-way to Tofino and Ucluelet. Port Alberni has historically been a fishing and logging community and enjoys the benefits of having both ocean frontage (it is located on a deep-water inlet leading from the Pacific side of the island) and lake frontage on Sproat Lake.

Serene Sproat Lake Mountain Views with Swimming Dock

Sproat is a large lake offering warm water swimming in the summer and a plethora of recreational activities including waterskiing, fishing and lounging around on your waterfront deck with a Margarita and some appys (my personal favourite). 

Now that you know a little about Sproat, I will go directly to a synopsis of the Q&A with Dave. Please keep in mind that this is just a summary of Dave's answers and we are not including the entire details of the video interview here.

1. Summary of the different areas of Sproat Lake

The Renowned Mars Water Bombers on Sproat Lake

There are three main real estate areas on the lake:

• Taylor Arm: Quiet area of the lake. Features mostly recreational cabins and lots that have road access.
• Dog Mountain: Quiet area as well. Features boat access only cabins and lots.
• Stirling Arm Dr and Faber Road: Busier and more populated areas of the lake closer to town. Stirling Arm Drive features many estate sized lots and expensive large homes (although these can be found on other areas of the lake as well).

Click here to view this discussion on the video including the map of the lake so you can see these areas.

MARKET UPDATE FROM DAVE & HIS TEAM, SEPTEMBER 10, 2015:

There haven’t been any sales at Taylor Arm this year.  Waterfront lots or small cabins on Taylor Arm generally start at $300,000. 

2. Boat Access Cabins - Dog Mountain

The Dog Mountain area of the lake is where the majority of the boat access only cabins are located. The time to get to this area by boat (about 7 minutes for a fast-run trip) is surprisingly short which makes it an attractive option for those seeking to really get away from it all but without having too much of a commute. 

Click here to see the Dog Mountain discussion and here for the sales pricing discussion from 2013 ( for Dog Mountain and Taylor Arm areas.)

MARKET UPDATE FROM DAVE & HIS TEAM, SEPTEMBER 10, 2015:

There was a forest fire in the Dog Mountain area this summer which unfortunately resulted in no sales there this year. The fire is now history and fortunately only one property was burnt down and the rest were unaffected.

3. Recreation on Sproat Lake

My Kind of Recreation: Dock, Boats, Sun Tanning & Swimming

Sproat lake living offers many recreational opportunities. Swimming and other fun lake activities (ski-bob anyone?!) are popular from June-September; however, Dave and his neighbours have a competition to see who can take a dip in the lake the latest in the year. So far, October seems to be the limit, but I'm sure that it's not a leisurely dip at that point!

Sproat allows power boating since the water naturally gets refreshed several times a year so all of the activities that come along with power-boating can be enjoyed (waterskiing, house boating, etc...) 

Fishing is also popular, without rainbow trout being the main attraction June-September. Fishermen here can also enjoy freshwater fishing in the nearby Somas River or salt-water fishing in the Alberni Inlet. It's definitely a fisherman's haven!

There are 4 Provincial Parks bordering the lake offering a variety of hiking trails, beaches and campgrounds. Sproat Lake Provincial Park is also recognized for it's Petroglyphs (ancient rock carvings of marine creatures).

See recreation discussion here.

4. Market Conditions

While waterfront sales in BC were booming in 2006-2007, the recession of 2008 in Canada hit the waterfront and luxury real estate markets in many small towns in British Columbia hard. Dave says that Sproat Lake was not immune to the effects of the recession but that many of the buyers interested in Sproat Lake property are local so it has not been hit as hard as some other communities. Still, Dave says prices are down as much as 35% in some cases and that there are some "deals" out there.

Dave and his team have had a busy summer with quite a few lakefront sales this year. He says the waterfront buyers are still out there ready to purchase, which is unusual for this time of year. This follows the general trend we have seen in Canadian real estate this year of higher fall sales while buyers rush to nail down mortgage rates before they rise.

Video discussion of market conditions - Oct 2013.

MARKET UPDATE FROM DAVE & HIS TEAM, SEPTEMBER 10, 2015:

Market conditions are improving overall for single family dwellings.

Our development project which we’ve had for sale for a number of years at the Klehkoot Marina is currently 80% sold out and we will have some new homes on some of those lots in the spring.  We look forward to offering those for sale.

 As summer rolls up, we still have buyers looking.  We have two more pending sales and are optimistic there will be a few more this year yet.  We expect 2016 prices to continue to stabilize.

5. Deals

(Please Note, these deals are from the original blog post dated Oct, 2013) 

In closing, Dave mentions some properties he feels are good deals right now. 

Dixon Drive - Exquisite 4-Bedroom Home in Premier Location $699, 000

Taylor Arm Drive - Completely Remodeled 4-Bedroom Home $749, 900

The full interview features many more details about Sproat Lake real estate (including entertaining anecdotes about lakefront living), but for now we will leave you with the cold, hard facts. The statistics below show the sales of single-family dwellings on the lake from 2011-2013 and lots back to 2006 (sorry for resolution). Stats and photos for this post provided by Dave and his team. 

MARKET UPDATE FROM DAVE & HIS TEAM, SEPTEMBER 10, 2015:

If you'd like to view other properties available for sale on Sproat Lake listed on our site, please click here.

Last Rays of Another Beautiful Day on the Lake

Thanks again to Dave Koszegi, Randi Clayton & the rest of the team for making this happen!

After several years of lagging, word on the street is that the BC recreational real estate market is showing signs of life again this year. Many of our member agents report an uptick in interested buyers buzzing around their offices and inquiring about properties this summer and with good reason. In many communities, the slower market for the last several years has resulted in lower asking prices and with mortgage rates still low (although creeping up slightly this week), BC waterfront is an attractive option for many buyers who were waiting on the sidelines to jump in again (no pun intended).

One place that was hit especially hard throughout the slump, is the idyllic island(s) of Pender. Located in the Southern Gulf Islands and accessible by ferry from both Vancouver (Tsawwassen) and Victoria, "the Penders" have many of the benefits of Gulf Island waterfront living as nearby Salt Spring, but with a much lower price tag and a quieter lifestyle.

Our member agents on Pender have been mentioning that their recreational real estate has slowed down substantially in the last few years, but it really hit home when I viewed the report from Landcor showing waterfront single family detached sales from the last few years. According to the report, sales went from a height of 21 in 2007, to less than half of that in 2008. The number of waterfront sales has been substantially lower than in 2007 every year since with only 2 as of June 26, 2013. Of course, there are a few pending sales that are not showing up in the stats yet, but with an average sale price of only $503, 750 so far this year for recorded sales (compared to $818, 333 on Salt Spring) and a high inventory of waterfront and view properties for sale, it is definitely a good time for buyers to take a closer look at the Penders. I decided to contact some of our waterfront specialists on Pender to get a first-hand account of what is happening in the market.

Pender Island Waterfront Single-Family Detached Sales 2006-June 26, 2013

Statistics Provided by Landcor

After perusing these stats, I decided to contact some of our waterfront specialists on Pender to get a first-hand account of what is happening in the market. Our member agent and co-owner of Dockside Realty Ltd.,  Sam Boyte, explained that with the high inventory of homes for sale,  prices have become more competitive and there are currently some very well-valued homes for sale. He says that buyers are starting to take notice of the price drops on Pender Island waterfront properties (over 20% in some cases), but because of high inventory levels, buyers are making sure to get the best value for money (Read=buyer's market). Rob Southey of Pender Island Realty agrees, commenting that the most expensive sale so far this year was an ocean view acreage for $610, 000. He says that there is a great selection of upper-end property for sale on the island right now and that pricing is more flexible than it has been in the past. 

Sam provided us with a look at the overall sales recorded by VREB over the last few years and the trend with recreational property on the island is similar to that of the total real estate sales on Pender:down. Is this the low point? Maybe. It's difficult to forecast real estate with the market swings we have seen in the last 5 years, but one thing is for sure, there are some nice properties available now at a good price point and there's possibly some good bargaining to be had- at least until the word gets out. 

Pender Island - Market Statistics  (Historical MLS Sales-All Companies)

*Source: Victoria Real Estate Board Statistics. Searched by SOLD properties from Jan 1-Dec 31 in each year provided.

Pender Island Oceanfront Property Picks

Here are some very well priced waterfront property picks from our member agents.

Oceanfront Home, 1 Acre High-Bank South-Facing Property $415, 000

Captivating Views from this Oceanfront Home $540, 000

Note: Priced at $30K below the 2013 Tax Assessment. Sellers are motivated!  

Several articles about the future of the BC real estate market peaked my interest this month. These articles were positive about the long-term future of BC real estate.

The first article, found in Ozzie Jurock's Insider newsletter, cites a study written by the Urban Land Institute based in Washington, D.C.: Global Demographics 2009: Shaping Real Estate’s Future. The study looks at the effects of population, urbanization and aging on real estate. According to the study, the echo baby boom generation (born early to mid-80's) will be getting into the property game in the next two decades. This generation is as large (or larger) a segment of the population than the baby boomers were and will have a huge impact on property values in the coming years. The echo generation getting into the property game, combined with the downsizing of the aging baby boomers, should result in increased pressure on the urban condo and townhome market. According to the report, the demand for suburban mansions and subdivisions will be overtaken by demand for smaller homes and condos that are in walkable communities, close to amenities and jobs. The report named Canada as one of the countries with "attractive real estate investment and development prospects once the recession subsides," and mentions western Canada as an area of promise.

On the recreational front, both Royal LePage and RE/MAX released reports on the current trends in Canada. Royal LePage reports that 64% of Canadians still view recreational property as a good long term investment and 55% of us would be willing to make compromises in order to attain the goal of owning a cottage (ie. rent it out, share with other families, etc...). The top three desires of potential cottage owners in BC? Peace and quiet, access to utilities and four-season use. RE/MAX, meanwhile, cites the importance of Gen X(30-45yrs old) in the current recreational property market. Their Youtube video states that in over 74% of rec areas across the country, this demographic is currently driving the market. According to RE/MAX , these buyers are looking for good value and opportunity (ie. my interpretation "deals"). I concur with this as we have been noticing very value driven buyers on the site in the last 6 months.

So overall, it seems that well-chosen and priced B.C. real estate is a solid investment for the long-term. According to the above reports, whether you are looking to invest in an urban condo, townhome or a quiet lakeside retreat, there should be plenty of demand for both once the recession lets up. In the meantime, keep your eyes open for deals (next fall/winter...?).

Well, we noticed it staring waaay back in February but interest in BC real estate has picked up from the slow summer and fall of 2008. At Waterfront West, we have the advantage of being able to see the interest pick up before the sales start to come through. Back in February, we noticed an increased number of inquiries going through the site. Now this is fairly normal for February, but this time, the inquiries seemed to be more serious than the ones from last Spring. Now that the stats are coming out, we are starting to see the sales as these serious buyers  make deals.

In Oak Bay, one of the most prestigious areas in Victoria, 50% of the listings are selling, while in some other popular areas (Fairfield, Maplewood, Glanford, etc..) well over 50% and in some cases 100% of listings are selling. Even we are shocked by news of bidding wars so soon. In Vancouver, Ozzie Jurock mentions a case of a lot coming up for sale in Kitsilano for $800, 000 and going through a bidding war between 15 different buyers to sell for $840, 000. Meanwhile, here in the Comox Valley there we are aware of at least one bidding war last week on an under priced property.

A good hint for judging the market in any area you are looking to buy is to go on Twitter and do a search for your key words. Here is what we turned up by searching Vancouver real estate today:

"There were 114 New Listings and 90 Sales (Sell/List of 79%) of homes in the Vancouver real estate market on Wednesday April 29th, 2009."

"Another day with nearly 1:1 list to sale ratio in the City of Vancouver real estate market. 6 calls already on my new east van house listing"

Victoria Real Estate:

"Our Real Estate Board is showing 747 Unconditional Sales on MLS in April in Victoria..Buyers are taking advantage of lower Interest rates"

This gives you real time results of what people are talking about in real estate. 

The real question is, is this activity just a blip in the market? A short Spring pick-up before we go back down hill? It's hard to know, but if you are selling, I would say don't get too greedy. The buyers out there today are quite savvy-after all they waited out that crazy market until prices came back down and they are buying at a time of very low interest rates.  Make sure you price competitively and that your home shines. If buying, the competition is out there for the good deals in larger cities so keep this in mind. In many areas of BC, you still have the upper hand for now, but who knows for how long?

The Landcor BC 2008 Residential Sales Summary was released earlier this week with some surprising statistics. Although there was an overall (anticipated) 28% decrease in the number of residential sales in BC in 2008 (over 2007), the average sales price increased 10% over 2007. This sounds hard to believe amidst all the negative media out there, but is most likely due to the sales in the 1st and 2nd quarters weighing heavily on the stats. The price drops we have seen in recent months are often not reflected in statistics until a later date so I would expect them to show up in next years' stats.

Other highlights of the report are detailed here:

    *  Detached homes and vacant land had the greatest decrease in number of sales and condos the least.
    * Q4 was miserable with a 36% drop in sales over Q3.
    * Out-of-province buyers down by 37%.

A note on the out of province buyers: Albertans still remain the leaders. 69% of out of province buyers hailed from Alberta in 2008. The most popular areas for them to purchase included the Okanagan and the Kootenays and condos and vacant land were their most popular choices for types of real estate to buy.

Conclusion:

As I mentioned above, the price increases seen in 2008 were in my opinion a result of strong sales last Spring before the market really started to take a turn for the worse. I would expect to see decreases in prices as we review 2009 statistics.

The good news is that since prices have started to become more competitive in recent months, the buyers have started to return to the market. Many of our clients are reporting more inquiries and deals going through in the last month. In addition, many sellers are becoming aware that the market has changed and pricing their homes well. Hopefully this will be enough to give the market some pep again and we'll avoid a situation similar to what they have in the US (although things are starting to look up there again too in some areas).