Market Insights - BC Waterfront Real Estate

As of Septmeber 15th, Waterfront West has joined Interluxe Media 's Alliance of Affluence. InterLuxe is an alliance of like-minded web publications that attract a sophisticated, affluent audience. Alliance membership provides traffic growth, content and audience development. Through the alliance, Waterfront West will be attracting clients from other luxury web sites. Members of the alliance include other notable web sites such as  www.justluxe.com , www.quintessentially.com and www.luxuryindex.com.

InterLuxe Media is backed by two leading interactive media firms: JustLuxe and RGM Razavi Global Media. RGM (www.razaviglobalmedia.com) and JustLuxe (www.justluxe.com) have years of successful experience in both creating original website destinations as well as partnering with publishers to grow their interactive business. In addition to representing the site-wide (banner) advertising for www.luxuryrealestate.com, Razavi Global Media works with luxury clients including Polo Ralf Lauren, Cartier, The Ritz Carlton, Jaguar, Lexus, Grey Goose Vodka and Veuve Clicquot to name a few.

As I wrote a few weeks ago, the price drops are starting to show in the BC real  estate statistics. Landcor just released it's second quarter Residential Sales Summary and it shows median price changes of between 3.8 to 15.6% across the province. The biggest changes have happened in Northern BC, where prices are down over last quarter anywhere form 1.2 to 15.6%. Other areas of more notable changes include the Okanagan (1.9-8.7%) and the Kootenays (1 to 7%), while Greater Vancouver and Vancouver Island have remained relatively stable despite increasing inventory (no more than 3.8% price changes).

As I have mentioned since the beginning of this slowdown, Albertan interest seems to still be quite strong despite the slow markets in Calgary and Edmonton. I have kept a tally on our site visitors and the percentage of Albertans visiting the site has consistently remained high (20-25% of Canadians visiting the site). Albertans have made a comeback this quarter over last with a 36% increase in purchases. They favoured (in order) the Okanagan, the Kootenays and Vancouver Island and the majority bought (in order) condos, vacant land and detached homes. On the down side, buyers from the US and other Canadian provinces have slowed. 

Current market conditions should soon reflect lower sales prices as sellers who need to sell are taking lower offers and causing some markets to waver.  

Well, the headlines are out, the bears are saying "I told you so" and listing inventory is soaring. In his recent Facts by Email, Ozzie Jurock noted a very fussy buyer's market on the Sunshine Coast with some fabulous waterfront homes now available for under 1 million (for a different picture, click here for details on the waterfront market there last year).

Here in Courtenay, we have started to see price reductions and other areas of the province are experiencing the same thing. In Victoria, for example, according to the blog at www.cheaprealty.net, there is apparently a 20 month supply of properties over 1 million for sale right now and a recent Globe and Mail article suggested that Victoria's real estate is 30-35% over valued.

Negative headlines, over supply, higher interest rates, banks tightening up on lending...all of these factors have combined to mark the beginning of a downturn in B.C. real estate and although prices are already going down slightly, the stats have not yet revealed much of a change. I expect that shortly, the headlines will start to reflect price drops in many areas of BC. I don't expect them to tank rapidly, but rather edge down to a more affordable level slowly. After all, it is just another real estate cycle (albeit we had a longer and crazier upswing than normal) and prices are bound to drop a bit as the cyclical nature of the market returns.

So what does this mean for the B.C. recreational market? I have always maintained that the buyers are still out there. And why wouldn't they be? B.C. still has some of the most pristine and beautiful waterfront in the world, in a politically stable country with a very high standard of living. Moreover, internationally, B.C. waterfront still represents excellent value for many international buyers.

Throughout this slower real estate year our traffic has increased by at least 30% and there are still inquiries going through the site to our sellers and properties selling. Buyers are simply taking longer to make decisions and rightly so, given the market conditions. The days of multiple no subject offers are pretty much over and this, in my humble opinion, is a good thing. In fact, the best time to buy is often in a downturn when nobody is talking about real estate and an over supply of homes are languishing on the market. This is when the true investors and saavy buyers get in on the market. Then, assuming they can hold on until the next upswing, they can potentially make a small fortune when they sell!

So, as I have mentioned recently, if you are a seller, price your home competitively and make sure it shines above the competition. Then advertise, advertise, advertise. Try to make sure you get a plan from your real estate agent prior to listing detailing exactly what they will do to advertise your property. If you're a buyer then take your time because now you can find the property of your dreams without all the pressure.

I missed last week as I was away on my annual vacation to Salt Spring Island. Of course, we had the worst weather we've had in weeks while we were there but still had a good time. A couple of years ago, the owners of the resort that we stay at decided to strata the resort and sell off the individual cabins and camping spots. At the time, the (very) rustic one bedrooms sold for $60,000-$80,000. Now they have increased in value by 3 or 4 times their original purchase prices. Of course, our entire crew of vacationers (about 6 families) was saying "could have, should have"-something I swore I'd never say when I got into this business.

Anyhow, we recently just found out about another resort on Salt Spring offering full-ownership of their cabins from $329, 000. This resort has access to the only known mineral springs in the Gulf Islands and has an organic health spa on the premises. More information can be found at their real estate web site http://www.saltspringresort.com/.

On another note, I hope you have noticed our new flash image viewer. We finally decided to go ahead with this after much deliberation over slower image load time; however, so far, I think it is a definite improvement as  it adds an aesthetically pleasing look to the site while enabling buyers to view larger photos of the properties without having to scroll down the page. I hope you agree, but as always, any suggestions are welcome.

For a long time now, I have been planning to donate some of the proceeds from Waterfront West to a charity and I have finally decided to get into action and do it. Last week, we started a campaign to donate $1 for every email inquiry that goes through the site and $30 for every verified sale that happens as a direct result of the site to Canuck Place Children's Hospice.

What is Canuck Place? Canuck Place Children's Hospice helps children and teens with life-threatening illnesses and their families. Canuck Place offers world-class healthcare in a home-like environment as well as music, recreation, school, play therapy, counselling and many other benefits to these children and their families.

Why Canuck Place? Besides the obvious help they give to these children and their families, friends of ours have a daughter with a rare form of muscular distrophy. She has spent time at Canuck Place for the last few years and it has been the highlight of her summer. Her family has also appreciated the care they have given her and the support they have received there, so through them, I feel a personal connection to how Canuck Place is helping families in B.C..

We hope that the fund raising activity helps Canuck Place and  we plan to continue the fund raiser on a more permanent basis.

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.

This morning I received a call from a private seller wishing to advertise his extensive private lakefront property near Victoria on our site. He mentioned an article in this morning's Times Colonist as his source for finding our site. Lo and behold, an article about the historic Deerlepe property in Sooke which is showcased on Waterfront West was printed on the front page of the business section today.

Due to the article, traffic has increased about 30% so far and we expect to get some more sales of large estates on the site soon so stay tuned if you are interested in these types of exquisite properties!

Every year, Chicago based real estate agent and author Mark Nash compiles a list of the top luxury housing trends from a survey of over 1, 000 industry professionals. This year, along with the continued popularity of the destination or spa bathrooms and gourmet kitchens, a few more extras showed up that might surprise you.

Building Trends:

It seems that the boomer market is looking at elevators with an eye toward their later years. Rather than buy a rancher, just install an elevator to avoid the dreaded stairs.

The ultimate in lifestyle living. Luxury buyers prefer their floating hoes to be in calm protected waters (as I'm sure everyone does).

We have referred to this emerging trend in the blog before as I noticed a higher than usual number of inquires from buyers interested in creating this type of lifestyle. Probably due to a desire to leave less of a footprint on the Earth combined with fear of fallout from dwindling oil reserves in the world and future high energy costs.

According to a variety of sources including HGTV , the decor trends for 2008 are as follows::

Finally we got some long awaited (if short lived) summer weather last weekend. My family and I decided to take a short trip to Hornby Island to take advantage of it and rented a vacation rental cottage for the weekend. After spending a thoroughly relaxing and enjoyable weekend, it occurred to me that renting a vacation property is an excellent way to test out the location of your future real estate.

Even if you can't rent out the property you plan to purchase, you can make some observations you normally might not think of by renting out a nearby home for a couple of nights. Here are some considerations you might not think of until you actually stay at the location:

When you stay at a vacation rental, you can get an idea of the public foot traffic to expect on your waterfront. During the day at our rental there were only a couple of passers by so the beach was almost completely private, but due to the fantastic sunsets, small family groups would set up for a barbecue or campfire at the end of the beach. The property was still quite private though as no one seemed to venture within 100 metres of the beachfront in front of the cabin. Moreover, the property was the last one before the beach turns into high bank waterfront so there are miles of quite private beachfront to walk on from the property heading north.

Although the exposure can tell you a lot about the sun a property will get, don't forget that tress, hills and other natural obstacles may cause a site to get less sun than you would expect. Staying at a location will enable you to see where the suns falls at all times of the day. Do you prefer sunsets or sunrises? You will be able to see which part of the bay/beach gets the exposure you prefer.

Although you cannot always forecast this, staying at vacation rentals on a few different beaches should give you an idea of how much storm activity they get. Our little place at the beach at was noticeably less windy than other beaches on Hornby and the water was quite calm most of the time. Perhaps you want to hear the constant lapping of waves on the shore so you want a beach with a constant wind. In many cases, this is something you won't know until you've stayed at the beach you plan to buy on.

Staying at a vacation rental allows you to interact with neighbours and locals. Asking questions about the neighbourhood will give you invaluable insight into the area. Perhaps there is a grow op a few houses down or a problem neighbour. These are things you will not find out from a regular house viewing.

Ok, so most of the waterfront locations in B.C. will not be on an ambulance route but staying at a property will give you an idea of noise nearby. Things to consider might be traffic noise, noise from nearby heavy industry (shake mills, logging, etc...) and plane traffic (seaplanes or jets as many airports are located close to water).

Love the smell of a sun baked sandy beach? Spend a couple of days on the beach to see if your dream will come true there. Perhaps the smell from a local mill or seafood plant will put a damper on that dream.

Although most of the above disaster scenarios will be out of the norm for waterfront properties in B.C., it is definitely worth the time to check out your neighbourhood or beach before buying. As a bonus, you have an excuse for a nice relaxing vacation!

A 48-berth marina designed for owners of luxury yachts should be open for business in Victoria's Inner Harbour by this time next year. Alberta based Western Asset management Development Group is developing the $20 million marina which is designed for yachts between 65-140 feet long. The marina is being built partly in response to an increase in these types of yachts being built (770 last year alone). Developers of the project expect some of the owners to be from Victoria but many international "mega-yacht" owners as well as Victoria is increasingly becoming a real estate haven for the ultra-rich. Some approvals are still pending on the project including a provincial water lease.

Have a great long weekend!

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.

If you've been keeping up with the news lately, you've no doubt noticed some articles about the development planned for the mouth of the Adams River. The project, proposed by the New Futures Building Group, was to include 218 year-round residences, a 160-berth marina and commercial space. Due to its location at the mouth of the river, famous for its salmon run, it faced by strong opposition from the Shuswap Environmental Action society who believe it will pose a threat to the salmon run.

In light of the opposition, developers agreed to completely remove the marina from their plans and also lowered the height of the planned commercial space from 16 metres to 11.5 metres; however, opponents would like to see the entire project cancelled and the land be made into parkland.

Meanwhile, in the Lower Mainland, the city of Chilliwack made a move to extend its boundaries to the area surrounding Cultus Lake and caused an issue with local native bands who claim that any change in title to the lands should result in the land going to them first. The developed land around the lake, which currently includes waterfront homes, marinas and a water slide park is currently leased from the City under renewable leases. When the amalgamation with Chilliwack was proposed, some owners of these homes and businesses suggested having the option to buy their titles which started the controversy.

Although City officials claim there are no plans to allow owners to purchase their titles, native leaders are preparing an application under the federal government's new claim policy.

So what does this all mean? Native land claims and environmental concerns have been the cause of controversy in B.C. for many years. For developers, research and due diligence when purchasing property and planning is of the utmost importance here. Ensuring that you have resolved any potential issues with local First Nations and that your development is designed in an environmentally friendly manner prior to making your applications will hopefully help you to sail through the process trouble free.

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:

This week, I thought I'd make special mention of a few properties that caught my eye as I was going through the site. I see a lot of waterfront properties during the day (or photos of them anyways), so I thought I'd mention some that have attracted my interest in the last few weeks. Of course, I haven't seen these in person and don't offer any guarantees, but if you like what you see, they could be worth a gander.

The first property is a private sale on Nelson Island on the Sunshine Coast. It features 2.6 acre, sheltered deep water moorage and 26' oceanfront. There are two winterized cabins on the property. With prices what they are on the mainland of the Sunshine Coast, this might be a nice alternative for someone wanting a recreational getaway from Vancouver. 

Another property that shows promise is an inexpensively priced oceanfront lot on Pender Island. At only $339, 000 I was sure it would involve a lot of work to get sewer/water, etc... to the lot, but the ad states that water & sewer hookup, hyrdo and cable are at the lot line. 

Last night, Waterfront West staff attended the "West Fest" event promoting business ties between the Comox Valley and Edmonton. The event was held at the Courtenay Museum with Mayors from the Comox Valley (Courtenay. Comox and Cumberland) as well as other dignitaries and numerous business people from both Edmonton and the Valley in attendance.

Some of our regular visitors may have noticed that we have made some navigation changes to the site this week. These include the following:

All of these changes have been done to improve the user experience and make it easier to find properties and information on our site. Any comments are welcome!

Have a great holiday weekend!