A stable local economy has buoyed the city’s real estate market despite the continued downward shift in unit sales and prices across the Kootenays, says a local agent.
Deanne Lockhart of Century 21 marked the strength and solidity of the city’s major employers—Teck Trail Operations and Interior Health Authority—as insulators against a market drop out now gripping the East and West Kootenay.
Trail literally remains an island in 2012 with an $8,278 rise in average sales prices across the board—according to figures recently released by the Kootenay Real Estate Board (KREB).
Only four other West Kootenay communities (out of 15) recorded marginal rises in average sales prices: Castlegar, Nakusp, Warfield and Salmo.
Lockhart said the city was doing “pretty well” with Teck continually hiring lots of people, and those people then looking for places to live.
“Our market doesn’t fluctuate like a lot of the other markets do,” she explained. “We do see some fluctuation but not to the degree like other areas … because we have some excellent employers.”
The average sale price of a single-family detached home, also called a single-detached dwelling or separate house, in Trail in 2012 rose from $159,720 in 2011 to $167,998—a five per cent increase.
The jump was greater in the rural region around Trail, with the average sale price of a detached home rising from $223,666 to $263,833 in 2012. It was also the same in Warfield where the average rose from $201,861 to $228,000.
Redstone Resort co-owner Cary Fisher said the increase was indicative of what was happening in the area, resulting in a demand for real estate.
He pointed to more people retiring now from Teck—and at a higher rate than the B.C. average—and consequently more people being hired.
“To go along with that our housing stock is very old compared to the B.C. average and remains very affordable,” he said. “I am not saying we are looking at a massive boom, but I am saying supply at some point very shortly will have a hard time meeting demand.”
However, average sale prices in 2012 dropped in Fruitvale ($225,211 from $266,437) and Rossland ($249,033 from $280,320).
The bottom has dropped out of the rest of the West Kootenay real estate market to date in 2012, making it the slowest in 20 years for units sold (1,071) and units listed (4,530) since the data was first recorded in 1993—with sales limping along at a 24 per cent sales rate.
Contrast that to Trail. In 2012 almost 50 per cent of all units listed in Trail (87 sold, 177 listed) were snapped up—a rise from 32 per cent in 2011—out performing the Kootenays’ nearest hot market of Castlegar where 45 per of all units sold (83 sold, 183 listed).
In fact, the real estate market has been heating up with the weather in the Silver City in June, with sales moving along at a clip of over 70 per cent with 19 units sold out of 26 listed, compared to 35 per cent (15 sold, 43 listed) in 2011.
The news is not so rosy in other Kootenay locales. Some real estate markets are wallowing in decline in 2012 like Nelson, lagging behind at 31 per cent (65 sold, 212 listed) and Grand Forks sluggishly bringing up the rear at 18 per cent (20 sold, 110 listed).
Cranbrook led the East Kootenay with a 37 per cent (143 sold, 384 listed) sales rate, while Fernie followed at 31 per cent (42 sold, 137 listed), Invermere at 27 per cent (30 sold, 112 listed), Kimberley at 26 per cent (57 sold, 226 listed),
Contrary to common perception, however, not all of the homes selling in Trail are on the low end of the price scale. In fact, Lockhart said there isn’t a lot of the low-end stuff moving. Instead, mid-range priced homes are currently the most active sellers and the most attractive to prospective buyers.
“If you look at what it costs to renovate a house, if you can buy one that is already done—and there is a pretty good selection out there—that’s what people prefer to do,” she said.
Although inventory in the low end of the market has remained high, the market value for those homes has begun to drop. What people bought in the peak of the market for $120,000 six years ago has slid, said Lockhart, with the same house worth around $70,000 on the current market.
The trend at Trail’s low end mirrors what is happening across the Kootenays, said the B.C. Real Estate Association’s (BCREA) chief economist, Cameron Muir. He said “flat is the new up” for 2012 in the Kootenay region.
“Elevated inventory of existing homes continues to weigh on the Kootenay market and will limit a rise in home prices in the area,” he said.
As a result, market conditions remain tilted strongly towards buyers, with prices expected to decline for the rest of 2012.
Muir felt a modest improvement in market conditions coupled with a pick-up in consumer demand would keep home prices roughly flat next year across the Kootenays—exactly what Lockhart predicted for Trail.
“I think we’ll see more sales but you won’t see big price increases because the world economy is not stable at this point,” she said. “There won’t be a price jump for at least two years.”
Despite the ailing market across the region, the average sale price for a Kootenay home rose in 2012, said Paul Shreenan, KREB president.
“The average sale price for a residential home in 2012 within the East and West Kootenay is approximately $283,000 and is up from $275,000 last year,” said Shreenan. “And the latest KREB statistics for East and West Kootenay show the same high level of inventory this year as last year and similar sales numbers.”
However, specific sales of several high-end homes in the East Kootenay drove up that average, and were not indicative of the market’s performance overall.
In 2012, 32 per cent of all residential detached units listed were sold in the Kootenay region—594 out of 1,879 listed—up from 2011 when 26 per cent of all units were sold (481 out of 1,866).
Shreenan also commented on interest rates saying that, “all information we’ve received suggests it is increasingly unlikely that the banks will begin raising interest rates in 2012.”
Average sale price 2012 2011Castlegar – detached $275,225 $266,352Castlegar rural – detached $281,492 $267,563Fruitvale – detached $225,211 $266,437Grand Forks – detached $187,958 $189,444Grand Forks rural – detached $175,250 $352,944Greenwood – detached $93,700 $105,500Kaslo – detached $278,250 $326,250Nakusp – detached $216,000 $175,000Nelson – detached $335,192 $340,514Nelson rural – detached $314,150 $335,464Rossland – detached $249,033 $280,320Salmo – detached $154,300 $122,500Trail – detached $167,998 $159,720Trail rural – detached $263,833 $223,666Warfield – detached $228,000 $201,861