Market Insights - BC Waterfront Real Estate

I just received my copy of the Landcor British Columbia 2007 Residential Sales Report and thought I would share some insights and market stats with you. The report shows that despite economic problems in the US, BC real estate continued to flourish in 2007. According to the report, in 2007, the residential property market showed gains of 15% over 2006 in dollar volume reaching a record high of 62 Billlion. Overall, property sales (incl. single family, townhomes and condos) only slipped a slight 0.6% from 2006.

Here are some of the other main points of interest:

While # sales declined only slightly in the Okanagan and Fraser Valley, they declined by 7% in Northern BC, most likely due to the weaker labour market as a result of the US housing collaspse and less demand for lumber. Despite these areas having slightly weaker sales, dollar value of sales still increased over 2006 as median sales prices increased in all regions and for most property types in 2007.

The out-of province buyers statistics correlate closely to the viewing audience of our site. Of the Albertans who purchased second homes in BC, around 50% originated from Calgary. Americans made up around 10% of international buyers.

The report remains positive for the 2008 market citing solid gains in the labour market and lower mortgage rates. In addition, the report forecasts that the Okanagan, Vancouver Island and the Kootenays will continue to see demand from retirees and second home buyers.

About Landcor:

The beginning of March marked a noticeable increase in inquiries to our sellers and traffic on the site, signalling a continued demand for B.C. waterfront property in 2008. Despite higher prices and a fewer sales of waterfront province wide in 2007 than 2006, traffic on the site has almost doubled since last year and shows no signs of slowing. The stats listed below show unique visitors to our site last January, February and March as well as this year's numbers:

January 2007 - 5, 862

February 2007 - 6, 601

March 2007 - 7, 405

January 2008 - 9,861

February 2008 - 9,323 (leap yr)

March 2008 Forecast currently 12. 000-13, 000

Furthermore, email inquiries have picked up and sellers are reporting increased interest from serious buyers in the last few weeks.

Despite the real estate slowdown in Alberta, we are still seeing 23% of our Canadian visitors originating there, over 50% of who are from Calgary. This is exactly the same statistic as last year during the same time period, so there is obviously still pent up demand for B.C. waterfront in Alberta. In addition to these numbers, the percent of US (yes, US!) and UK visitors has increased slightly year over year.

Although I am no psychic, I expect the market to be more balanced this year than in past years, with buyers in the million plus price range taking more time to choose their property. The sense I get is that there are a lot of buyers out there with anywhere from $300, 000 up to about $$650, 000 or 700, 000 to spend on a second home that they will retire to and when the right properties come available in this price range they are snapped up quickly.

Towards the end of last year, I received a couple of phone calls from large property websites in the UK looking to add some Canadian properties to their offerings. Apparently, feedback from their site visitors indicated that they wanted to see more properties in Canada. When looking at our site stats, I have also noticed an increase in visitors from the UK and well as Germany recently.

From Jan 30, 2007 until today, the percent of UK visitors to our site was 3.3 and Germans made up 1.7%. If we look at the stats for January of this month; however, UK visitors are have increased to 4.6% of our visitors and Germans to 2.9%.

Freddy Marks, our member real estate agent who works in the Cariboo, reports that many of his buyers are from Europe. In fact, he estimates that 35% of his business comes from Germany, the UK and the Netherlands. We have also received direct inquiries recently from UK buyers asking about specific properties for sale on the site.

Anecdotally, my mom has a rental property and her last two tenants have been from overseas: a family from Scotland who recently immigrated here and a couple from England who have moved here to teach skiing. It only took a quick Google search to find this recent article in the Independent promoting the virtues purchasing of Canadian resort property.

A recent survey of British and Irish property buyers done by business research firm Datamonitor showed an expected annual growth rate of 13% for the overseas property industry. While Spain, France and the US were the top three countries of interest for these buyers, Canada was amongst the most popular locations. Moreover, the study showed that most of these buyers were paying cash and buying for lifestyle.

Why Canada? Our high standard of living, natural beauty, the strength of the real estate market and rising values over the last few years, as well as the favourable exchange rate make it appealing as an investment and lifestyle choice for international buyers.

While we are still seeing a tremendous amount of interest from Alberta and the Lower Mainland on the site, we will be keeping an eye on the stats to see if this international interest continues to increase.

Ever wanted to see how much your neighbour's house is worth? Or find out the values of homes in a neighbourhood you are interested in? Until January 31st, you can do so for free by visiting BC assessment's website at: http://www.bcassessment.bc.ca. New to the site this year, you will also be able ro view recent "sold" prices; a nice bonus if you are looking to buy. Property owners who wish to appeal their assessments (to lower taxes), may do so but the appeals must be filed by midnight PST on Jan 31, 2008.

If our site statistics prove correct, 2008 could be a busy year in the BC waterfront market. Typically, unique visitors to our site increase every month from January until August and then slightly decline until the end of December. Our current forecast for this month is for approximately 10, 000 unique visitors, which is similar to our numbers at the height of the season for last July so this warrants well for 2008 waterfront sales.
In addition, inquiries going through the site have increased and some of our member Realtors are reporting a busy start to the year.

Although we haven't received the final stats for 2007 yet, we anticipate the results will show that 2007 waterfront sales were down slightly over the record-breaking 2006 sales, but that prices were up in most areas. Judging by the number of inquiries going through the site , two "sleeper" areas to note (although already gaining in popularity) were the lake country north of Kamloops (where prices are lower than other resort areas in BC) and the Cowichan Lake area on Vancouver Island.

In speaking with many Realtors throughout the year, we noticed a trend toward a quieter waterfront market in areas previously bolstered by US buyers- in particular southern regions of Vancouver Island outside of Victoria (Sooke) and the Southern Gulf Islands. Watch these areas in Spring for a possibly emerging buyers market.