August 31, 2011
Where the Price is Right
While all eyes are on the Lower Mainland, reasonable prices and excellent investment opportunities are to be found in the small towns outside the major markets – and now is the time to be assessing the opportunities, says Ozzie Jurock.
When one looks at recoveries in residential real estate, it is always the major markets that come back first. This is now being seen in B.C., where the most expensive areas – the West Side, Richmond and White Rock – are seeing high sales and record prices. The ripple effect will spread the recovery to other Metro Vancouver areas – thus, the savvy real estate investors should now be scouting for opportunities on Vancouver Island, the Sunshine Coast, the Kootenays and even Northern B.C.
There is a resource boom that will shake northeastern B.C. Gas and oil exploration is booming around Fort St. John and Dawson Creek, while gigantic projects are being lined up in the northwest. The $6.6 billion Site C dam, green-lighted by the province last April, will create 7,000 construction jobs.
At Kitimat, Rio Tinto Alcan has received a $300-million injection for its ongoing $2.5 billion expansion that still employs 1,000 workers. Last week, the $3 billion Kitimat LNG plant became closer to fruition after the two main partners, Apache Canada Ltd. and EOG Resources Canada Inc., announced they have awarded the front-end engineering and design contract for the LNG facility. As well, the $1.3-billion Pacific Trail Pipeline to deliver natural gas to Kitimat LNG; the $5.5-billion Enbridge Northern Gateway terminal and oil pipeline project, which would move bitumen from Alberta to Kitimat for export and create 165 long-term jobs in the town; and the $150-million Crab/Europa Hydroelectric Development by Kitamaat Renewable Energy Corp. that would include two hydroelectric facilities, are all active.
You can buy a very nice four-bedroom house in Kitimat for less than $70,000 and just last month we found 50 detached houses and townhouses priced under $150,000. And yes, you can still buy a 10-suite apartment building for $25,000 a suite, too!
The average price of a detached house across all of the Kootenays is now $271,757, according to Landcor, compared to $289,000 two years ago. Local realtors confirm there are deals everywhere. In Kimberley (where I spend my winters) for example, you can buy detached houses, even duplexes, for under $180,000 and prices for ski condos (full ownership) are down 30 per cent from their peak. Example: An older two-bedroom, 954-square-foot, ski-in, ski-out condo at Kimberley for $164,900 (Marilyn Jolie, Royal LePage, 250-427-0070). With oil at $100 a barrel, lake-challenged Alberta buyers could be coming back to the Kootenays – we expect price recovery to be seen by 2012.
SEA TO SKY
Whistler: All prices at Whistler have come down – the Olympics having made no difference (which we forecast, ahem). However, now Whistler prices may very well be at the bottom. You can buy two-bedroom condos in Glacier Reach for instance – nine for sale — priced from $400,000 to $430,000 that had originally sold from $497,000 to $634,000.
Just 40 minutes from Vancouver, the former logging town has a ton of condos for sale and building lot prices are a fraction of Metro Vancouver’s. The median detached house price in Squamish, at $425,000, is now 15 per cent below what it was three years ago. Since the first of the year, only five condos have sold through MLS in Squamish. At the new prestige University Heights development surrounding Quest University building lots are $175,000 and a 2,500-square-foot luxury house is around $699,000. You can also buy freehold condos at Squamish in the $170,000-to-$180,000 range and outstanding ones in the mid-$200,000s.
Nanaimo housing unit sales were up 19 per cent from February 2010 through February 2011. The average sale price was down two per cent from Feb. 2010 and the median home price was $369,500, reports Nanaimo realtor Steve Pakozdy. Parksville/Qualicum unit sales were down 13 per cent from February 2010 to February 2011, while the average sale price was up three per cent and the median house price was $342,000, reports Parksville realtor Ian Lindsay.
Major point: British Columbia’s smaller towns are lagging far behind in the recovery, but could see the biggest percentage increase over the next two to three years. Central 1 Credit Union is forecasting that hot spots for housing by 2013 will be the Central Okanagan, the Cariboo and the Kootenays. Find a good local realtor and be ready to buy when the spring listing surge hits the market.
Ozzie Jurock can be reached by e-mail at firstname.lastname@example.org or www.jurock.com.