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 REW.ca 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?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

That's Gold Jerry! Gold!

The Internet can be a wonderful thing.

Ideas can be shared and, as realtors have found, it's a fabulous way to spread your message to intended clients.

But sometimes it can make you look foolish. Bloggers know this all to well.

Make a prediction that's wrong... and people can go back and bring it up for years to come.

Give investment advice that is wrong... and people will hold it against you for years.

A good example is our recent post about a hotel condo at the Blackcomb Lodge now selling for 65% off it's 2005 launch price.

One of our faithful readers, pipewrench, responded to our post and shared a link he had come across from a Whistler realtor from February 2010.

A 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.

On full display then as it is now, despite the fact the realtor acknowledges that (at the time of the 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."

It came, of course, during a series of articles talking about how real estate prices had collapsed post-Games at other Olympic venues.

Realtors, naturally, told you it was different here.

It's a relevant theme to touch on because as we noted on May 18th, the local real estate cabel has been attempting to dissuading people locally from believing all the negative mainstream media articles about a looming real estate crash and that buyers shouldn't be expecting a significant correction in our local housing market.

As Tsur Sommerville said:

"To expect across-the-board 10%, 15%, 20% drop in house prices, I think that being rather, er, hopeful, for a buyer to expect that."

Hmmm.

For real estate bear blogs who are watching the current Whistler Real Estate market crash hard... the 2010 posting is pure gold.

Here you had a realtor telling you in Feb. 2010 that "with a high level of inquiries and good prices, Whistler is considered good value in the resort market."

Whistler was over priced then. And it's over priced now - hype notwithstanding.

The same goes for real estate in Greater Vancouver.

Here, for your viewing pleasure, is a screenshot of the blog post (click on image to enlarge):

Now... I would love to link directly to the post so you can go and see it for yourself.  But I can't.

A curious thing has happened since pipewrench posted the link in the comments section last Monday.

Another faithful reader, Makaya, picked up on pipewrench's comment and reposted it over at the excellent real estate discussion site, Vancouver Condo Info.  

VCI seized on it's newsworthiness and, under the heading Whistler's Nasty Collapse, made it yesterday's main story.

However, about 8 hours after the post, VCI's readers suddenly came up on a dead link... the embarrassing article had been removed. Clearly some realtors were unhappy with all the embarrassing attention.

But not so fast.  

VCI contributor, patriotz, quickly accessed Google cache and retrieved the article.  Another contributor, The Ant, collected screenshots and posted the content of the article for posterity.

Real Estate Value In Whistler Best In 9 Year
Posted by: Lilian Feb, 2010

For people expecting the real estate prices in Whistler to drop after the Olympics, I’m afraid you’re going to be sorely disappointed.

According to George Klimock from The Whistler Real Estate Company, property prices in Whistler today are already 15-25% lower than previous prices in 2007. In fact, current prices in Whistler are down to 2001 levels.

With a high level of inquiries and good prices, Whistler is considered to good value in the resort market, with, for example, a 2 bedroom condo is now listed at $ 519,000 as opposed to the more expensive $ 630,000 a few years earlier.

According to the 2010 Whistler Report from Landcor Corp,the average price of a condominium has started to climb recently, back to the $400,000 mark, first established in 2002. Since 2008, the condominium market has flattened. But, new ownership types, including quarter share ownership, have been introduced into the market, increasing affordability. This likely has helped to keep assessed values stable at or close to the $400,000 level. Townhouses in Whistler, typically priced between condominiums and single detached units, ranged from $650,000 to $750,000 from 2001 to 2007, but dropped below $600,000 during the recession.

Those looking to step into the Whistler market for the first time under the notion of a lower price, may be disappointed. Whistler homeowners receive good cash flow from renting their properties out most of the year and as such are not as motivated to sell as homeowners in other areas. Whistler is considered to be near the bottom end of pricing when compared to other resorts such as Sun Valley and Aspen, with price adjustments as low as they were in 2001-2002.

“The mistake many people make when they look at prices of property in Whistler is to compare [prices] with the price of properties in their city. You can’t compare Whistler to Vancouver because Whistler is a destination resort, designed for people to own secondary and vacation properties, not their primary residences. In order to get an accurate picture of what prices are like for resorts, you have to look at other resorts like Sun Valley, Park City and Aspen. In fact, Whistler is currently less expensive than Sun Valley and Aspen and Park City is higher priced.Whistler is currently a good buy for resort property,” says Klimock.

Klimock predicts that the current sales volume in Whistler will continue throughout the year with a fairly active winter season. He believes the Olympics will be good exposure for the resort, but through the long term rather than the land rush that occurred in 2002 because speculative buying due to the Olympics has been virtually non-existent. The market will take 6 to 8 months to increase in sales, with more destination travelers arriving to the resort in March and April; after the Olympics, but prices may increase after next year.

Ultimately, Klimock believes that sales volume in Whistler will gradually increase, but Olympic success is a non-issue. “Buyers are still interested in Whistler, with or without the Olympics. As a world-class resort, Whistler has unparalleled world access and is in close proximity to a major city, Vancouver. No other resort in North America can claim that. Having the Olympics is great marketing for Whistler, but I don’t think it would have any major effect on prices or the amount of people buying.”

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.

Kudo's to the blogging community for their quick action.

And to paraphrase that famous line from the Seinfeld episode, all I can say is... That's Gold pipewrench! Gold!

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Whistler at 65% off now?

Back at the end of March, we talked about Whistler hotel condominiums selling for 50% off their original issue price.

Well... the plunge continues.

This unit in the phase 2 development of the Blackcomb Lodge in the Whistler Village has had it's asking price slashed again.

According to the realtor, these lofted studios were selling at $369,000 at their 2005 launch after a $5 million dollar upgrade to the lodge.

And despite the fact they sleep 6, include a fully equipped kitchen, indoor swimming pool, hot tub, sauna, ski concierge and that the strata fee includes all utilities, phone, cable & hydro... the current asking price is now a stunning $240,000 off the original 2005 price.

That's a 65% haircut on the original investment... and no buyer in sight!

Seems the downhill slide in Whistler continues.

(hat tip to Makayla)

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Whistler's Empty Storefronts

It's been over a month since we last cast our eyes northward to Whistler and noted property owners had begun dumping properties to cut losses while they could, and over two since we noted some properties were selling for 50% of their previous values.

The winter ski season is now over and by all accounts it was a highly successful one courtesy of Whistler’s epic snowfall levels.

Several room-night records were broken, and Whistler Blackcomb’s latest quarterly results, released May 9, show increases in both revenue and skier visits. Overall, room nights are expected to be at least 10% higher than last winter.

So businesses should be leaping for joy, right?

Apparently they're celebrating by closing up shop.

One of the local news rags, The Pique, is reporting that Doc Branigan's restaurant is now closed due to the fact that this building has been foreclosed upon by the bank.

Will they locate somewhere else in the Village and re-open?

"Branigan's was working toward changing the liquor license so the restaurant could offer more entertainment varieties in the space but, a spokesman said, (but with this development) the shareholders decided to cut their losses and cease operations."

The Elephant & Castle restaurant in the Delta Whistler Village Suites has also stopped operations.

Property manager Drew Meredith said Calgary-based restaurant chain Original Joe's has purchased the Elephant & Castle brand and the new owners of the chain have no plans to open an Original Joe's outlet in Whistler.

In the village itself, the doors of the Pizza Café are also closed and have been for more than a week.

The European café at the corner of Lorimer Road and Main Street appears to have also closed. The cafe is notable because the owner, Miro Kolvek, was one of the six candidates in the running for the job of mayor in the last municipal election.

The Savage Beagle nightclub also closed last month.

The foot and apparel store Merrill, located in the Village Centre beside Eddie Bauer, is preparing to shut down. Store manager Dave Booth said June 27 will be the final day of operations.

Food Plus in Creekside is also closing, and Loka Yoga is looking for a new location starting June 1 after receiving notice that its rent is being more than doubled.

And it's the last tidbit that has some wondering if it isn't time to reexamine the way the municipality conducts business. The lifeblood of any municipality are it's taxes. Are Whistler's simply too high?

According to Loka Yoga’s owner the rent at the Saint Andrews House location where they had set up shop was set to jump from $2,500 to $6,700 per month!

Why the huge jump? Apparently it costs $12 per square foot each month just to cover property taxes in a Village commercial space. If that figure is accurate, that’s $8,400 per month for a 700 square foot space — just to cover the property taxes.

Whistler is now beginning to face the dreaded deflation scenario. As property values drop, revenue from property taxes falls. Meanwhile businesses, hurting from declining revenues, cannot afford the property taxes currently in place, let alone handle any increase to offset the drop in revenue from property owners.

And any cut in the tax rate can only impact municipal amenities, services which are crucial in a resort destination like Whistler.

The hard times are only just starting for the Sea-to-Sky community and the catch-22 is under way.

(hat tip to Patiently Waiting for the news links)

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

Tues Post #1: Another 'peak' at what's happening in Whistler

Time for another trip up the Sea-to-Sky highway to see what's happening in Whistler.

The picture above is of Greyhawk Condominium.

Specifically unit #303-3317 Ptarmigan Place, Whistler BC.

Unit #303 is a 2,200 square foot “penthouse”. Designer furnished and equipped, it was described as an open floor plan, 2 story, with vaulted ceilings, 3 bedroom plus full office property with the best of everything: full house sound system, TV’s in every room, electronic blinds, air conditioning, top of the line appliances, steam shower, jetted 2 person tub, rare and unique wood species, travertine tiles, granite counters, heated floors plus an HVAC system.

Located in prestigious Blueberry Hill steps away from the Valley Trail and the Whistler Golf Course, the property was purchased in 2007 by an Okanagan resident for $1,730,000.

It was listed in early 2009 for $1,995,000.

According to zrh2yvr who posted over on Vancouver Condo Info, the property sold this week for $1,250,000.

That's $745,000 less than the asking price, $510,000 less than what the owner paid for it in 2007.

It's an example of a wise 'investor' cutting his losses before the real crash takes hold in earnest.

Would you have the guts, or the brains, to do this?

Or would you hold out until you got 'what your property is worth'?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

The Noose tightens... Whistler is down 50%

It's fascinating when you talk to people about real estate in Vancouver. No one can conceive of a 25% drop in prices, let alone 50% or greater.

If you are one of them, faithful reader, take a moment and cast your eye up the Sea-to-Sky highway to Whistler.

You remember Whistler.

Co-host site of the 2010 Olympic Games, best ski mountain in North America. Was it only 6 years ago the real estate furvor started taking off there?

Sites like Whistler real estate online.com hailed the 'can't-miss' money making opportunities that abounded.

"Real estate Whistler is very popular and in demand and will continue to provide all types of buyers, sellers, and investors with opportunities... Get involved with Whistler properties before the 2010 Winter Olympics.

Have you seen real estate Whistler recently?... There are many different types of properties available today on the market for real estate Whistler. The price ranges vary from as low as $100,000 to over $10 million. Don’t let real estate Whistler values keep you away though as there continues to be a lot of interest in the area. Real estate Whistler will boom through the 2010 Winter Olympics and astute investors will see their profits soar."

Here's a screen shot of that site for the archives incase it disappears (click on image to enlarge):

So let's check in on Whistler. How are those "astute investors" making out with those "soaring profits"?

Not so good apparently.

Headlines in the local news on March 1st tell us real estate is crashing hard: 'Hotel condominium units hit hard by current economy - Some units selling for half of original value.'

Condos selling at 50% of their original value? Say it isn't so.

Quoting from the article:

Those who own a condo unit in a Whistler hotel are sitting on great potential, but at the moment the units are not showing great value.

Real estate consultant Denise Brown with Re/Max Sea to Sky Real Estate reported that a unit that originally sold in the Four Seasons Whistler for about $1.1 million was recently resold for only $520,000.

"We've seen the prices come down significantly," she said.

The article is a great read for those interested in what happens to speculative dreams that turn to a nightmare.

We hear from Pat Kelly, of the Whistler Real Estate Company, who tells us that when condo hotel units first became available in Whistler expectations were high.

"The economic climate in Whistler and around the world was much different and the number of destination visitors to Whistler was larger. People were buying on vision. Revenue has not met expectations in the last few years."

According to Kelly, the lower than expected revenues produced through hotel condo units have combined with exchange rates, high strata fees, high property taxes and fixed overhead costs to drive prices down.

That last sentence of Kelly's summarizes the whole speculative mania:

"People were buying on vision. Revenue has not met expectations in the last few years."

Meanwhile RE/Max's Denise Brown observed that the people who were relying on the hotel condo units to produce high returns beyond covering all the costs associated with owning this type of property are getting out of their investments. And they're clearly willing to take a 50% loss to get out of those investments now before it gets worse. There simply aren't the buyers today who are willing to make the same mistakes those earlier 'astute' investors made.

Said Kelly:

"People aren't willing to spend as much in Whistler as they were a decade ago. It's not anything wrong with Whistler or that Whistler is worth less. It is just that people are prepared to spend less."

The collapse we are seeing on Vancouver Island and in the Okanagan has now crept to within a mere 90 minute drive up the Sea-to-Sky highway from Vancouver.

How much longer until we start to see these same comments about real estate here?

==================

Email: village_whisperer@live.ca
Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.

And the walls... came tumbling down.

Last month we talked about how Vancouver's Condo King, Bob Rennie, was involved in developments in Kelowna (Invue) and Vancouver (Fairmont Estates) that were slashing prices by 40% and we wondered... is Rennie simply moving to get ahead of a crash he can see coming down the pike?

Since Rennie's Kelowna move there have been 3 consecutive months of decade low sales stats.

Tales abound of stagnating conditions throughout the Okanagan.

And now more evidence that the market on the periphery of the Village on the Edge of the Rainforest is collapsing.

Could it be Rennie has accurately anticipated the market?

As you can see on this realtor website, the 40% correction (as a start to the great real estate collapse) has now come to Whistler.

One of the suites in the luxury Four Seasons development at the base of Blackcomb Mountain (which sold in 2002 for $400,000) has sold in a court ordered sale for $250,000, more than 40% off the original 2002 price.

And with tourism down dramatically from an American economy in tatters combined with the negative press from a bankrupt ski resort prominent in people's minds, are more such sales all that unexpected?

Meanwhile, on the Sunshine Coast, statistics from the Real Estate Board of Greater Vancouver show that the benchmark price for detached homes is down by 14% in one single month! A precipitous mounting collapse if the trend continues.

Mainstream media are now picking up on the story, and as news stories trumpet the collapse, no amount of R/E cheerleading is going to lure potential buyers who fear they may be catching a falling knife.

Surrounded by real estate that is starting to collapse, is Vancouver really different from everywhere else?

On September 8th the Bank of Canada will be announcing their next move. Speculation is that interest rates will rise another .25%.

What will another rise in interest rates do?

Will the upper end of Boomers, those within five years of retirement - 70% of whom have no funds set aside for retirement and are dependant on cashing in on their bubble inflated real estate - realize what is going on around them?

Will they begin a dash to list their homes for sale in advance of their planned retirement?

Having paid $60,000 for a westside home 40 years ago which is now appraised at $1,600,000; how many will slash their asking price dramatically knowing they are still realizing a massive profit but must cash out now before the market crashes?

There is still time to salvage their retirement plans if they move aggressively, but the clock is ticking fast.

On the real estate chat boards there is some evidence that dramatic action may already be occuring in other parts of the Lower Mainland.

Posts talked about a listing at 1405 Apel Drive, Oxford Heights in Port Coquitlam. From the listing:

"Beautifully renovated 5-Bedroom Home in the prestigious Oxford Heights neighbourhood of Port Coquitlam. Bright and sunny backyard, great floor plan and room for everyone! This home is a MUST SEE! Just steps to an elementary school, parks, nature trails & transit, and just a short drive down the hill to shopping, groceries, restaurants and coffee shops. Fully fenced yard with loads of room for the kids to play!"

Listed for the below market price of $379,900, the MLS listing (V848662) appears to no longer be available. Was it immediately snapped up as a way below market opportunity - setting the benchmark for what is to come?

And if we see similar 'rush-to-sells' - moves which will almost assuredly push prices down 30-40% right off the bat - what will become of all those who bought in the last three years with 5% down? Those 3-5 year mortgages are coming up for renewal, and they will be massively underwater.

Good thing "it's different here" (TM).

Like sand through the hourglass...

==================

Email: village_whisperer@live.ca

Click 'comments' below to contribute to this post.

Please read disclaimer at bottom of blog.