You’ve probably been hearing it everywhere; the buyers are here but there are no homes to sell! Whistler is experiencing historically low inventory, but just why is this the case? Here we look at a few factors contributing to the low inventory, or supply of homes in Whistler, and what this means for buyers and sellers. If you are looking to sell or buy a new home in Whistler this year, or are just curious about what all this inventory talk is about, then read on.
The numbers are in and January 2017 recorded the lowest number of homes for sale in the last 10 years. Inventory levels have been on a downward trend since 2012 however since the summer of 2015 the stock of homes in Whistler has really started to decline. This drop was felt more significantly in the detached single family home category, but was also mirrored in phase one and two townhomes, condos and shared ownership properties. In 2016 many sellers capitalized on the favourable market conditions with a 22 percent increase in transactions compared to 2015. This has resulted in many opportunistic sellers having already sold, and although the buyers still remain, many of the motivated sellers have already cashed out leaving little available inventory in their wake.
Supply and Demand
Turning to the basic law of supply and demand will explain how low inventory is pushing up prices in Whistler over recent years. The average transaction price rose 12.6 percent in 2016, pushed up by an increase of buyers often finding themselves in multiple offer scenarios. In 2016 sales prices were consistently 98-100 percent of the list price. In weaker markets, like Whistler experienced in the years following the Olympics, the percentage was around 90 percent.
Another unique factor responsible for low inventory in Whistler is the bed cap limit. In an archived blog post I explain exactly what this is. Essentially, in Whistler’s Official Community Plan there has been a cap put in place with regards to future residential development. Although there are a few developments moving forward, including 250 bed units for Cheakamus Crossing, development in Whistler is restricted due to the cap, therefor unable to meet demand by building new construction.
Strong rental incomes
Many home owners are reluctant to sell due to the strong rental yields. Whistler’s residential vacancy rate is 0 percent, and with another bumper tourist season those with investment and recreational properties are seeing strong returns from consistent visitor nights and higher rates. With large-scale projects like the Renaissance only likely to increase the tourist demand, many Whistler property owners are waiting to see the effects of this.
Home owners stuck
Those who purchased their first or second home in Whistler, and who may be ready to up-size are being forced to stay where they are due to escalating property prices. Homeowners living in Whistler are likely to trade a smaller-than-comfortable house in for the lifestyle at their doorstep. In other markets these buyers may move to another suburb or town to up-size. In Whistler there are some families choosing to buy in Pemberton or Squamish, but many are content with their housing arrangements considering the world-class amenities they have access to.
If inventory remains as low as it currently is, the market may level out as buyers seek affordable housing elsewhere. In every market there is an overall ceiling and when this is reached the bulk of buyers will move on. For sellers, this presents the perfect opportunity to cash in on your Whistler property. For buyers, those who are staying active in the market, have pre-approvals in place and are willing to be flexible with what they are seeking are having the most success.
Whistler is a world-class destination and living the coveted Whistler lifestyle, or investing in a lucrative Whistler property asset will always be the dream for many. If you are looking to sell your Whistler or Pemberton property this year we can help. Alternatively, if you are looking to buy in Whistler or Pemberton we can represent your best interests during the transaction and ensure you get priority listings as they hit the market. Contact Lance Lundy today for more info.