Real estate

Is it a good time to buy real estate in Whistler?

Buyer hesitation and rising interest rates mean fewer bidding wars and a major slowdown in sales

Looking to buy property in Whistler before ski season?

Good news: you’ll have more time to step back and weigh your options before you pull the trigger than if you were looking to buy a year ago.

“The bidding war is over,” said David Higgins, chief broker at Whistler Real Estate Company (WREC).

The average number of days Whistler properties have on the market across all property types was 60 in September 2022, compared to 39 in September 2021, added Madison Perry, a RE/MAX Sea to Sky Real Estate agent. , in an email.

“The best news is that in more areas of the market than there is now, there is room for negotiation for buyers,” she wrote, which after the scenarios of “Highly competitive, multi-offer pressure cooker that Whistler shoppers have experienced over the past year,” is a breath of fresh air for them.

Broken down, single-family homes in Whistler spent an average of 55 days on the market in the third quarter of 2022 (Q3), compared to 43 days for townhouses and 31 days for condos, according to the Q3 market report from the WREC. Although these numbers are significantly higher than the number of days on market recorded in the second quarter and the same three-month period last year, “these numbers are relatively normal compared to historical levels.”

The bad news for buyers? Borrowing money to buy property will cost you a lot more than in 2021.

After slashing lending rates to almost nothing at the start of the pandemic, Canada’s central bank has raised its benchmark interest rate six times in just over eight months in a bid to rein in soaring inflation. The latest measure, a 50 basis point hike announced on October 26, brings the Bank of Canada’s current target rate to 3.75%.

Whistler “is not immune” to those same economic stressors that have driven the Canadian real estate market down from coast to coast, Higgins said. In Whistler, the effect of these increases manifested itself in a corresponding slowdown in sales volume in the third quarter. July and September ranked among the 10 lowest monthly sales volumes of the past decade, according to WREC’s third quarter market report.

After recording $406 million in sales in the first quarter, Perry said Whistler brought in $164 million from 102 total sales across all property types in the third quarter of this year. In terms of volume, that’s less than half of the 232 total transactions the station recorded throughout the third quarter in 2021.

Perry attributed the decline to a combination of low inventory (more on that in a minute) and buyer hesitation. “Thanks to interest rate increases, buyers are watching the market and waiting to see how house prices will react,” she explained.

But with that in mind, Perry said he noticed different segments of the market reacted differently to rate increases. “Properties under $1 [million] are still quite competitive, as buyers want their little slice of heaven, especially investment properties to let overnight,” she explained. “Cottages and single-family homes are definitely under downward pressure, which I believe is because affordability is being affected so significantly in this sector of the market.”

In Perry’s view, “the luxury market seems relatively untouched by recent events,” she added.

Yet prices continue to rise year on year. The average price of a cottage or single-family home in Whistler hit just over $5.1 million in Q3, up from $4.73 million in Q2, while condos rose. sold at an average of $907,576, down from $1.16 million in Q2, from just over $1.6. million for a townhouse ($1.84 million in Q2). The average sale of a vacant lot in Q3 was $143,333.

But given Whistler’s limited number of sales, Higgins warned, a high-value deal could significantly skew those numbers.

(The average sale price of a cottage in Whistler reached just over $4.1 million in 2021, compared to $3,265 in 2020 and $2,861 in 2019.)

In Whistler, “prices easily go up and down,” Higgins explained. “Right now, if I can’t sell my house, I can rent it out for a lot of money, so I don’t need to sell it. If you don’t need to sell it, that means the prices won’t change. So [sellers will] hold on.”

To that end, while buyers have more time to evaluate their options, that doesn’t mean there are an abundance of options to evaluate in the first place.

According to the WREC, Whistler’s inventory is up about 29% from the second quarter of 2022, but it still trails 37% below the resort’s 10-year inventory average.

With about 234 listings in Whistler and 60 in Pemberton last month, “in terms of inventory, we’re still historically low in both communities,” Higgins said.

“A balanced market would be closer to 350, 400 in Whistler and 100 and change in Pemberton,” he added. “Our inventory is still low. It’s climbing, but the pace of sales has slowed. We are not selling at the same rate… as a year ago.

Higgins said he expects to see sales volume increase in the fourth quarter as Whistler’s market is bolstered by its limited supply and substantial demand, especially as tourists return to the resort in droves. “We always see interest in October, November,” he explained. “There is always interest there for people who want to get their hands on a place for the winter.

And, with long-term rentals seemingly more impossible to find by the day (stay tuned for more coverage on housing constraints in the coming weeks), the shortage of rental housing in Whistler could also play a role. in stimulating real estate sales.

Amid a lack of pressure from Vancouver buyers, Whistler property prices, on average, “are not likely to go up,” Higgins conceded. “But a leveling, it all depends. This is when it’s very market specific – if you’re looking for a ski in ski out spot on the mountain this will always be [a property] people want to get.

Perry said she also didn’t expect to see “big drops” in prices, “because we are in high demand around the world and have such low stock to offer,” he said. she noted.