Kelowna's Big White feeling the real estate pain?

Seems Kelowna's Big White ski community is feeling the real estate pain.  A quick search of some online listings show there's red ink galore on the slopes.

Above is 200 Moonshine Crescent, Unit #12. Advertised as an "outstanding value" the listing says:

OUTSTANDING VALUE for Stand Alone Deluxe cabin priced $120,000 less than current owner's original purchase price! Features 1347 sq ft, largest of all the 2 bedroom cabins, 2.5 baths, sleeps six. Nestled amongst the trees of White Forest Estates.

$120,000 loss? Ouch.

There's this 'opportunity' where we are told:

"Developer of the prominent and very successful “SUNDANCE AT BIG WHITE SKI RESORT” says “SELL the REMAINDER of the LAND allowing another Developer to LIVE THE DREAM!”

Hmmm… more like share the loss.

How about this one (click on all images to enlarge):

"JUST REDUCED $140,000" screams the copy and now selling for $259,900? Ouch again.

Other real estate advertisements trumpet that Condos being sold in receiver liquidations are going for 60% off original launch price:

According to this article titled, B.C. ski resorts a “buyer’s market”: Reductions of 50 to 60 per cent from peak may stir flat ski-condo sales, the carnage is everywhere.

A buyer's market will greet potential buyers of ski condominiums at B.C.'s finest winter resorts this winter, with prices off as much as 60 per cent from the peak of four or five seasons ago.

"It's a buyer's market all right," said Bill Hanrahan, a real estate agent with Sun Peaks Real Estate near Kamloops. Real estate prices at the popular ski hill have been declining since 2008, Hanrahan said. As for sales, "We have been bouncing along the bottom for six to eight months."

As an example, he points to a selection of two-bedroom, two-bath Sun Mountain Villas that sold recently for from $230,000 to $247,000, with one recent listing at $195,000. Those prices would have started at $335,000 during the fat years before an international monetary crisis flattened ski-mountain sales. Some Sun Peak hotel-condos, which restrict usage by the owners and normally are pooled into rentals, have sold for as low as $20,000 this year.

At Big White ski resort near Kelowna, the remaining inventory at the super-deluxe Edge development - built in 2009 and now in receivership - has seen prices reduced 60 per cent. An example is a three-bedroom, 2,000-square-foot duplex in the complex that had $399,000 knocked off the property, which is now listed at $599,000. This pencils out to less than $300 per square foot, which would have once been considered a screaming deal for such high-end recreational property.

That price would be welcomed at Red Mountain near Rossland in the Kootenays, said Red's vice-president of sales and marketing Jim Green, who notes that most of the 15 ski condos for sale are listed from $225 per square foot. 

A three-bedroom luxury suite at Red bought in 2004 for $450,000 is now on the market at $275,000. 

Green points to even bigger price discounts: a 1,600-square-foot suite valued at $700,000 is now at $359,000 and has been on the market for at least six months; and ski-in, ski-out townhouses are listed at $270,000, or about half the original price

One local realtor described the general Kelowna market this way:

Although inventory levels dropped, (as many frustrated sellers took their homes off the market due to a lack of success) we still remain at levels that are over 20% higher than the average of the last 13 years. Sales rose due mainly to some sellers finally coming to grips with the prices that the buyers were able to qualify to pay.

But positive enthusiasm is the mantra of this business. Check out the 2014 market outlook from these two who could obviously be up to their armpits in manure and would still keenly enthuse, "Gee, there must be a pony around here." 

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Thurs Post #1: Mudslinging

Bubble, bubble, everywhere it seems everyone is talking about the Canadian housing bubble.

Even the international magazine, 'The Economist', is taking a poll of it's readers asking if they think Canadian housing prices are about to burst.

The Canadian Housing Bubble (with its two star children Vancouver and Toronto) is going viral in the international and American press. You have to believe, at some point, all this 'bubble chatter' is going to have an effect.

Everyone says Vancouver, especially the west side, is dependant on HAM (Hot Asian Money) to sustain values that local wages simply cannot afford.

So what happens to all that money as Asians (who contrary to local myth can read) begin to realize the Village on the Edge of the Rainforest isn't such a great place to park their funds?

And it's only going to get worse.

The pack mentality of the mainstream media seems to have kicked into overdrive and the thirst for bubble stories seems insatiable.

On Monday we talked about Kelowna and how a local realtor characterized the exploding foreclosure situation there. Yesterday the CBC picked up on the story and headlined 'Home Foreclosures Skyrocket in Kelowna'. 

The CBC article interviews Elton Ash, the vice-president of Remax Realty in Western Canada. He says most of the foreclosed properties are from people who were trying to flip homes during the hot market a few years back.

"People weren't able to achieve their goals in doing this and so they quit making payments."

Okanagan real estate agent Kent Jorgenson is asked about the situation by the CBC and says:

"The market in the Okanagan has really come to a standstill on that speculative investment front, and that is really what has been a major portion of the court-ordered sale thing that has increased so dramatically."

Ash goes on to say many Canadians are now buying vacation homes in the U.S., where prices are astonishingly low compared to British Columbia.

Everyone seems to think the Asian money tap will never end. But as the negative press compounds, will Hot Asian Money turn Vancouver into Kelowna?

Or, as this Global TV news story tells us, will Vancouver remain the most expensive housing market in North America?

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The Real Estate Market in Kelowna

Came across an interesting commentary on the real estate market in Kelowna (hat tip to 'Best place on meth' in the comments section of Vancouver Condo Info).

According to a local real estate agent in the Okanagan city, 5% of Kelowna listings right now are foreclosures.

Some comments from R/E agent Jason Neumann:

The Central Okanagan foreclosure inventory levels continue to show steady increases from month to month as 2012 is now well under way. Buyers ask me all the time if I foresee a large influx of future court ordered sales coming to the Kelowna real estate market? Having watched the foreclosure inventory rise from 10-12 average listings per month in 2006 versus the over 170 listings already in early 2012 obviously I would have to say yes I do!

There are currently 171 active foreclosures (as of February 10,2012) amongst the entire listing inventory (3,934 properties) for the Central Okanagan. There are currently 82 active foreclosures (as of February 10,2012) amongst the entire listing inventory (1,792 properties) for the North Okanagan.

Areas outside the Lower Mainland of greater Vancouver continue to languish and it appears the foreclosure rate is ramping up significantly.

According to this agent there were an average of 10-12 foreclosure listings per month in Kelowna during 2006. Currently foreclosure listings are running at about 28 per week. And given the long time it takes for the foreclosure process to play out, what we are seeing today isn't close to being a reflection the past 12 months. Hence the realtor's strong assertion that he foresee's a "large influx of future court ordered sales in the Kelowna area."

Downward pressures are clearly only going to intensify.

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