Market Insights - BC Waterfront Real Estate

Some of you may have noticed that I didn't have time to write my blog last week. I couldn't have said it better than the assistant of an agent in the Okanagan said it this week, when she claimed her office was in the middle of a "listings frenzy" and had over 52 listings as opposed to their normal 18 or so. At Waterfront West, we have been equally as busy with over 70 new properties on the site in the last week. It seems as though the market is rapidly turning into a buyer's market. A nice change for those buyers who have been waiting by the sidelines and refusing to give in to the pressure of bidding wars and "no subject" offers.  Judging by our site traffic (which is currently forecast to be about 4, 000 unique visitors more than last July), those buyers are still out there, but just taking thier time to make a careful purchase.

Landcor came out yesterday with their Quarterly Residential Sales Summary for 2008. The major highlights of the report showed that sales dollar value has declined in three areas: Vancouver Island, Fraser Valley and BC North/Northwest, while Greater Vancouver, the Okanagan and the Kootenay regions saw an increase in total sales value compared to the same period in 2007. Overall, total sales value in BC increased 5.6% over 2007 while the total number of actual sales decreased by 11.38%. In addition, of interest to the recreational property market, sales to Albertans decreased by 21% in the first quarter of the year compared to the same period last year.

While you can't argue with the hard stats, we still feel that there is a great deal of interest in BC from Albertans. Stats on our site collected from April -June 2007 and the same period this year show the % of Albertans has only dropped by 4%, and the number of Albertans visiting the site has actually increased year over year from 5734 last year to 5970 this year (same time period mentioned above). Moreover, anecdotally we have Albertan friends who still want to purchase here and are finding competition from other Albertans when they try to make offers. So the Albertans are still out there looking. We can't deny that the Albertan real estate downturn has affected the BC recreational market, but I don't think it has dampened the desire of Albertans who want to purchase property in BC or retire here-perhaps just delayed things a bit and lowered their purchasing power (for those dependent on the sale of their own home to buy here).

According to a BCREA news release this week, gas and food prices are slowing home sales as buyers take a wait and see approach to purchasing in the current housing market. Despite residential unit sales decreasing 31% from May 2007, overall average prices in B.C. are still up 6 percent from last year. In the meantime, major banks raised their mortgage rates by 1/2 percent last week, which may add to the slow down.

So what does this mean for the recreational market? Judging on traffic to the site (which is still well above last year's numbers) and email inquiries to our sellers, well-priced properties are still creating quite a stir. We have also seen this in the local market in Courtenay. I believe the key to selling right now is for sellers to price their home competitively. It seems there are still a lot of buyers out there who are taking their time to purchase, unless they see a home/property they feel is exceptional value. When a property like this comes up, it still gets snapped up and in some cases, there are even still bidding wars.

So what is a seller to do? If you purchased a few years ago, no doubt, your home value has increased a large percentage already so make sure your property is show room perfect, follow some staging tips, and price competitively. Before you list, go to some open houses in the neighbourhood and check out the competition. Imagine yourself as a buyer-would your home stand out as an exceptional value when compared to the others?

Finally, advertise, advertise, advertise (on Waterfront West-subliminal message). But seriously, make sure that your home is out there-on the internet (in more places than one preferably), in the local real estate papers and anywhere else you can think of. For recreational properties, reaching an international audience may start to become more important again as local buying slows down. Our stats show, the top 5 countries for buyers (besides Canada) for waterfront real estate in BC are US, Germany, the UK and the Netherlands so if your property is already on our site congratulations, you are reaching this audience.

All in all, it's still a great market to be in right now. There are still a lot of buyers milling about but with more properties to choose from and a better chance to make a more informed purchasing decision. Properties that show well and are priced competitively are still selling, so in most cases, sellers can still realize excellent profits given that they purchased their properties a few years back.

This week, RE/MAX released their recreational market update expressing (as we mentioned in the blog a few weeks ago) that rec. property markets across Canada will be more balanced this year. The report says that 91% of markets are currently in transition state from strong sellers markets to more balanced markets.

Salt Spring (Island) and two other areas in Canada (located in Sask.), were mentioned as the only exceptions. According to the report, inventory levels in these areas remain relatively low implying a prolonged sellers market. This came as a surprise to me as I have spoken to several Salt Spring agents in the last year and have found that at least anecdotally the rec. market there had slowed down as early as last summer due to the US housing woes and lack of US buyers who had previously been a factor in this mirco-market.

I decided to do a little more research and found a blog from local Salt Spring real estate agent Scott Simmons, listing some recent stats from the market. As I suspected, it seems from his recent stats that the high end market on Salt Spring is wavering a bit from it's height and possibly becoming a more balanced market as is the rest of the province. Scott's blog shows some Salt Spring stats from April which included:

• 2 price reductions:-One from 1.2 to 1 mil, the other from 1.3 to 1 mil
• Sale: Asking 1.5 mil range, sale price 1.3 mil range
• Sale: Asking 2.5 mil range, sale price 1.8 mil range (!)

Scott even implies that this (wide range between asking vs. sale price) "seems to be the trend" on the high end on Salt Spring. So if you're considering buying there don't dispair when you see the news headlines about Salt Spring's rec. market-there may still be a chance for you to get your piece of paradise for less than you think.

Reading the papers lately, I have noticed several articles regarding CMHC forecasts of lower housing starts across Canada by the end of 2008 and into 2009. Although BC bucked this trend for the first 3 months of the year, it seems the housing market may finally be beginning to balance after years of a frenetic pace, multiple offers and lines of buyers waiting to buy new condos.

In Vancouver, the listings inventory has spiked in the last few weeks and hearsay from our member real estate agents across BC is that the market is more balanced than in the last few years allowing buyers to chose a home more carefully. Don't get me wrong, I still hear about the occasional bidding war and multiple offers for the right property (and price)-it just seems that this is becoming less common than it was in 2004, when my husband and I sold our Vancouver house in one day for $30, 000 over asking (common in our neighbourhood at the time)-ah, those were the days (for sellers anyways!).

The news is good for both buyers and sellers. If your home is attractive, well built and properly priced, it should sell at market value (which is much more than it would have been worth at the beginning of this real estate wave). If it needs some work, don't get too greedy and be prepared to price it appropriately (you should still be way ahead of your profit margin a few years back). If you are buying and are not in a rush, take some time to determine exactly what you want. If find what you are looking for at the right price then make an offer. The nice thing about this market is that it might not have to be a "no subjects, cash" offer to get the deal.