Hoping to sell for major money? Wait for the rebound
By David F. Rooney
Need to move? Think because you see a lot of “For Sale” signs that the market is white hot because of resort development and you should cash in and check out now? Dreaming that you’ll make a real bundle when you do?
Well, the local real estate market may be flatter than you think.
“We are not seeing the numbers we were two years ago,” says Uldis Bokis of Royal LePage.
“The market today looks a lot more like it did in the years before the resort was announced (in 2005).”
The speculation that drove market prices through the roof since then has dried up over the last 18 months and prices are declining back towards more realistic levels.
“The drop in prices is dramatic,” Bokis said. “I don’t think we have one over $500,000 this year.”
You can see evidence of this in the rices being asked for single family homes. Before the recession many owners were asking for more than $500,000. Now, however, they are being priced at a more realistic $280,000 to $400,000 right across the North Okanagan real estate zone.
Locally, the average sale price of a single family home was $406,818. Today it is $298,766.
That’s a big decline.
Revelstoke prices are, on average, higher than Salmon Arm because of the resort but lower than Sicamous where there is waterfront property.
So who’s buying?
Baby Boomers with disposable cash that they have both set aside and inherited are certainly moving in. But so, too, are couples in the 25-40 range seeking.
“Once people would come to a place like Revelstoke because they had a job here,” Bokis said. “Times have changed. The younger people we’re seeing now are coming here to play and then they’re finding work.”
But what do people want to buy? There aren’t as many heritage homes on the market as there were a couple of years ago and that’s a problem.
“What we to offer now are homes built in the mid-1970s or ‘80s,” Bokis said. “People with money are not interesting in buying up 30-year-old homes.”
What they want in our nascent resort community are investment properties.
Purchasing a lot and then building on it is one way to go, but you had better be cash-rich. Lenders are being very conservative, Bokis said.
“If you want to buy a $160,000 lot you need $90,000 cash (before the banks will talk to you),” he said.
If you have that kind of money then you’re actually in pretty good shape because there are now so many builders and trades people around that you can afford to get excellent work done at a fraction of what it would have cost two or three years ago.
“Historically we really haven’t had an abundance of tradespeople in Revelstoke,” Bokis said. “Now things have changed. The economy is down and people are willing to accept less for their services.
“So now (if you have the money) really is a good time to invest.”
Bokis said Revelstoke seems to be lagging in some areas.
“Sales activity has increased in all areas surrounding us — Kelowna, Calgary, Vancouver — but we have not had any great activity in Revelstoke,” he said. “You can attribute that in part to asking prices that are way above market values. So if anyone wants to relocate and they find a home here where the asking price is $500,000 while a comparable home in Salmon Arm or Golden is $400,000 where do you think they are going to buy?”
Not unnaturally there are people who think that what happens at Revelstoke Mountain Resort does not or should not have an effect on the housing market. That kind of belief is a delusion.
“Like it or not it will be the resort that drives the market,” Bokis said. “It used to be CP Rail and before that timber. Now it’s the resort.”
So what happens at the resort matters — a lot. If RMR’s owners, Bob Gaglardi’s Northlands Properties, decide not to build the golf course or, say, encounter so many legal difficulties to do follow through on that component of the resort then it’s going to have a negative impact. But if the golf course goes ahead and the design by Nick Faldo proves irresistible to that segment of the tourism market then the real estate market will rev right up.
So which will it be? I guess those of us with property they’d like to sell will wait and see.