Real Estate: Whistler market

Real Estate: Whistler market

Thursday, November 15, 2012

After suffering a reality check, the Whistler real estate market realizes who they must sell to.

It’s been a while since we wrote about the real estate situation in Whistler.

What a stunning change from all the pre-Olympic hype.

The 2010 Olympic’s were going to transform Whistler and it was going to be a real estate bonanza.

Not only were prices surging in pre-Olympic speculation, but a lot of people were holding on to property until after the Olympics in anticipation of a surge of new buyers.

Anyone who bad mouthed the anticipated R/E nirvana was roundly dismissed.

In February 2010 a Whistler realtor named Lillian was boldly (and publicly) wagging her finger in admonishment at potential buyers who might be sitting on the fence about a real estate purchase in Whistler.

She said:

“For people expecting the real estate prices in Whistler to drop after the Olympics, I’m afraid you’re going to be sorely disappointed…The message is, if you’re waiting for prices to drop before purchasing property in Whistler, you may be too late. The time to buy is now.”
Ah yes, the‘buy now or forever be priced out’ mantra.

This despite the fact the realtor acknowledges that (at the time of her posting) the Whistler market was “already 15-25% lower than previous prices in 2007″ and that “current prices in Whistler are down to 2001 levels.”

Lillian, and other speculators, told you it was different here.

Here, for your viewing pleasure, is a screenshot of the blog post in case the link comes up dead (click on image to enlarge):
Fast forward to 2012. Back in May 2012 we noted that a hotel condo at the Blackcomb Lodge was now selling for 65% off it’s 2005 launch price. That post followed earlier ones about Whistler properties being down about 50%.

Reality has hit Whistler hard.

And now that we’re one ski season beyond the Olympics, and coming up on another, it’s becoming clear to those who do own property in Whistler that there’s not going to be a big run-up in prices. As real estate agent Shauna O’Callaghan, of MacDonald Whistler Realty, observes,

“The sellers who have decided to sell are motivated, and the buyers are getting good value. I think we’re seeing such incredible value in the market that it’s pretty exciting for buyers.”

It seems Whistler has come to accept their customers aren’t jet-setting Germans, high flying Americans, or even HAM. The meat and potatoes of Whistler real estate is locals from the Lower Mainland… meaning properties must be priced to sell to local incomes.

As noted yesterday:

About 70 per cent of Whistler homeowners are from the Vancouver area.

That’s right. 70% of Whistler homeowners are locals (who probably HELOC’d their Lower Mainland homes to buy in Whistler pre-Olympics) and now that those Olympic dreams of massive real estate profits have evaporated – they realize the only potential buyers are other Lower Mainlander’s.

As Ron Mitchell of Sutton West Coast Realty observed:

“From 1998 through 2002 there was large demand and property values went up 100%. Then the market softened slowly through 2006 where it basically bottomed out. At the same time, prices in Vancouver were going up and a lot of Vancouver people were jumping into the market. But the shock of 2008 put the brakes on all recreational and a lot of residential markets throughout North America.
“From 2008 people were holding on thinking the Olympics were going to spread some magic dust. Meanwhile, prices of unrestricted recreational properties — chalets, condos and townhouses — have softened by 20-25 percent. Condo hotels have dropped in value about 50 per cent from their peak in 2002-03, when American investors were buying them as revenue properties with their 65-cent dollar.”
Whistler Realtors say one of their biggest challenges right now is managing seller expectations.
“We’re dealing with discretionary items. Nobody really needs to have a second place at Whistler. So it does mean that the negotiation approach is more cautious, more investment oriented. We tell people we’ve had listings for two or three years, and that’s how long the absorption is for some of these properties. So if you don’t go into it with the expectation that you might not see an offer for six months, you’re going to get pretty frustrated, pretty quick… If you do not have to sell, if your expectations are not in line with the current market, don’t list it. It will just sit and sit.”
But don’t think the omnipresent realtor optimism is lacking in Whistler.
What are real estate agents pinning their hopes on?
The Boomer Trigger, of course.
Opportunities are beginning to attract people who want to live the Whistler life full time, says realtor Shauna O’Callaghan. “I think people moving here is the upcoming trend. I think you’re going to see people who might have had a $3 million home in Kerrisdale and now all of a sudden you can cash out and that’s a lot of money in the bank.
Riiight. Do you get the feeling Whistler is gonna get kicked again?
Whistler ?  Nice place to visit, beautiful area.
I harken back to the mid – 1980’s when the town center began to be built up…we had driven through one summer. Prior to that, it was a fairly small sleepy town, dotted with cabins. 
Then  a major developer, IntraWest  had a vision to turn it into something much larger. The premise is to develop upscale housing around an anchored recreational destination(other examples are Golf Courses) .
Of course, as time went on…Whistler kept winning Best Ski Hill in the World etc. awards. Whistler had one the THE most booming economies via the construction of Homes ,Cabins and Condos etc. I recall during the Dot .Com era…in the 1990’s many $10 + Million Homes were built….a friend and I went up to have  look….it was quite excessive extravagance.
In 2003…we won the Olympic Bid, and Whistler was the beneficiary of  a lot of taxpayer largesse, ie the overrated Sea – to – Sky Highway, Olympic infrastructure…and the delusion that Whistler was going to boom even further because of a 2 week party called the 2010 Olympics.
IMHO, Whistler was doomed to fail… people simply did not think logically. Nobody seems to sit down and think...what is this really ? A one industry town reliant on discretionary income. In my 50’s, I don’t know any of my peers that own at Whistler. I can foresee the Local Gov’t forced to raise taxes, and of course many owner pissed off  as they see their equity decline.  
You will hear the cry it is cheaper to rent more and more….Whistler owner used to make good $$$ renting their units out, but I submit the place will become flooded with rentals by those desperate to hang on.
The developer, IntraWest , had a vision, but it only carries so long. I duly noted that IntraWest sold their Whistler holdings just prior to the 2008 crash…(2) years before the Olympics…a wise move in hindsight, or like many smart parties,  know when to buy and know when to sell.
I really cannot envision much of a market for Whistler,…it has priced itself out of reach…and I don’t see the future buyers having the same interest…more people are being programmed to be urbanites. In addition….many who bought and  these units will come to a realization many are already…when they pass away and estates need to go through probate. If for example the Condo is worth $500,000 at the day of the last living owners passing away, The TaxMan deems it “Sold”  for $500,000…and the inheritors  usually has a few months to submit the tax approx. 30% of the value….. ie in this case $150,000. I would submit this will happen more and more as the demographic age of the the owner pool (say 60+ years of age and older) will pass away…and very few will be able to pay that tax..hence major sell – offs to raise the funds.
Again, if something can be deemed a “discretionary” buy , with the market built on non – primary needs and speculation….BEWARE
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