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Real estate showing gradual improvement

Lower prices, low mortgage rates increasing in Whistler properties

Whistler's real estate market is re-inventing itself again.

Many buyers are now focused on purchasing a home for the long haul rather that buying purely for speculation.

"The speculative real estate buyer doesn't have a place in this market," said Pat Kelly of the Whistler Real Estate Company.

He has seen a lot of different trends in his three decades in the industry, from the deep recessions of the '80s to the boom of the '90s to the current financial crisis. Now, after years of doubt he's seeing some interest return. "Back in the day it could have been 35 or 40 per cent of the market," said Kelly.

"But when you take that out of the picture you get back into the more traditional fundamentals of real estate. It's all about lifestyle - that's what's making decisions right now."

The sale price of real estate is down 10 to 15 per cent from the high mark, and has been at that level for a little while without going any lower, said Kelly. With increased interest and sales picking up it's likely that the prices may recover, although Kelly expects it to be slow and steady - a year or more - before prices more or less recover.

"My impression, and I watch it very consistently, is that the values in some areas are as good as I've seen in a decade." said Kelly.

"The only caveat is that people are doing their research on costs, maintenance costs and holding costs, and there are more people making lifestyle decisions than two or three years ago. There's no speculative investment.

"They're asking; 'Could I live here, could I bring my family here on a year-round basis, and is there full value for my dollar here in terms of my life and my family's life in the longer term?'

"It's a more sustainable type of real estate, rather than people buying and betting that (a property) is going to go up 20 per cent."

That's a big change from 10 years ago when Kelly saw the price of real estate jump 35 per cent in one year.

"Real estate is meant to be a good, long-term investment that has a lot of safety in it, as opposed to buying in and then flipping a year later. We're not seeing that in the market at all," he said. "There are still a lot of properties for sale so the demand would have to remain strong for a long term, 12 months or so, before we see any pressure for prices to move up dramatically."

There are exceptions. For example, there aren't many townhouses available, which has created a little more demand in that area. Some neighbourhoods are also more desirable and are priced higher as a result.

Whistler Real Estate Company, said Kelly, is involved in between 450 and 550 real estate transactions per year, and so far the company is on pace for roughly 500 sales based on 121 sales in the last quarter.

The level of interest is picking up. In recent months the company has received more calls from people looking at properties. The difference is that people aren't rushing in, and will look at a number of properties before taking their time reaching a decision.

Kelly said that's a good thing.

"We are at the bottom of a cycle, and my sense is that we are starting to come out of it," he said. "The consumer is still being cautious. A lot of people lost significant net worth in a short period of time, and as people get older they get more risk adverse. They're looking closely at their monthly overhead costs like strata, and very critically, at taxes. They're looking at heating and light and those annual operating costs before making a decision - it's a much more normal kind of real estate market than 10 to 15 years ago when people were betting on skier visits."

Kelly isn't the only local realtor feeling more optimistic lately. Laurie Vance of Sea to Sky Premier Properties is seeing a similar increase in interest, as well as more sales.

"Prices have really come down and buyers that have been laying in the weeds watching what's going on - globally, and not just Whistler - are seeing great opportunities here right now," she said.

"It's not just condos, but people buying multi-million luxury properties."

Vance also believes that the customers are thinking long-term with their investments, rather than looking to make some fast money.

"Maybe the stock market has been good to them, but they're moving their money out of the markets and into land. They're moving their currency around the world and trying to figure out where the best value might be," she said.

"And it's not just Whistler - we're also seeing the same trend for other mountain resorts, which is equally important. It's good for us as an industry when in Colorado they're seeing the same things as well."

In the first quarter (January through March), Vance said they saw chalet sales increase to 20 from 19 the previous year. The average sale price also declined from an average of $1.5 million to roughly $1.219 million in the same period, although she cautioned that the two years aren't comparable because of the types of properties that were available.

As for condo sales, Vance said they have seen 47 sell in the first quarter of 2011, compared to 20 in 2010 and 23 in 2009.

"We had two or three years where we were quiet, and we're seeing the interest pick up," said Vance.

Lifestyle is also a major motivation for buyers, Vance confirmed. The snowfall in the past two years - the second and third biggest years in Whistler Blackcomb's history - is motivating buyers, as well as all the things happening in and around Whistler.

"I think we're going to have a great year," she said. "There's all the excitement around the new Olympic Medals Plaza, we're hearing fantastic things about all of the public art that's going to be going on there. They've just announced a jazz festival.

"That kind of news for buyers and people interested in enjoying the resort year-round is very exciting. All of the arts and culture things we're doing in the resort, and the whole foodie movement are very exciting for the community.

"We have so many great things converging, like the fabulous cross-country facilities we have with the trails in the Callaghan. That's the kind of thing that buyers care about these days, and we're doing a great job when it comes to creating the kind of town that people like to visit and where people want to live."

 

 




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