Pace slows for Whistler real estate in Q3, but prices hold strong year-over-year
Buyer hesitancy and rising interest rates mean fewer bidding wars and a significant slowdown in sales.
Looking to purchase a property in Whistler ahead of ski season?
Good news: you’ll have more time to step back and assess your options before pulling the trigger than if you were looking to buy a year ago.
“The bidding wars are done,” said David Higgins, managing broker of the Whistler Real Estate Company (WREC).
The average number of days Whistler properties spent on the market across all property types was 60 in September 2022, compared to 39 in September 2021, added Madison Perry, a realtor with RE/MAX Sea to Sky Real Estate, in an email.
“The best news is that in more areas of the market than not right now there is room for negotiation for buyers,” she wrote, which, after the highly-competitive, multiple-offer pressure cooker scenarios Whistler buyers experienced last year, “is a breath of fresh air for them.”
Broken down, single-family homes in Whistler spent a median 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 WREC’s Q3 Market Report. Although those numbers are significantly higher than the days-on-market figure recorded in both Q2 and the same three-month time period last year, “these numbers are relatively normal compared to historical levels.”
The bad news for buyers? Borrowing money to buy a property will cost you significantly more than it would have in 2021.
After dropping lending rates to near nothing early on in the pandemic, Canada’s central bank raised its benchmark interest rate six times in just over eight months in an effort to curb skyrocketing inflation. The latest measure, a 50-basis-point hike announced on Oct. 26, brings the Bank of Canada’s current target rate to 3.75 per cent.
Whistler “isn’t immune” to those same economic stressors that have brought about a downshift in Canada’s real-estate market from coast to coast, said Higgins. In Whistler, the effect of those hikes manifested as a corresponding slowdown in sales volume in Q3. Both July and September ranked among the top 10 lowest monthly sales volumes in the last decade, according to WREC’s Q3 market report.
After recording $406 million dollars in sales in Q1, Perry said Whistler brought in $164 million through 102 total sales across all property types in Q3 of this year. Volume-wise, that’s less than half of the 232 total transactions the resort recorded throughout Q3 in 2021.
Perry attributed that drop to a combination of low inventory (more on that in a minute) and buyer hesitancy. “Thanks to the interest rate increases, buyers are watching the market and waiting to see how the housing prices will react,” she explained.
But with that in mind, Perry said she has noticed different segments of the market react differently to rate increases. “Properties under $1 [million] are still quite competitive, as buyers want their little slice of heaven, especially nightly rentable investment properties,” she explained. “Chalets and single-family homes are definitely seeing downward pressure, which I believe is due to the affordability being affected so significantly in that area of the market.”
In Perry’s view, “the luxury market seems relatively unaffected by the recent happenings,” she added.
Still, prices remain up year-over-year. The average price of a chalet, or single-family home in Whistler, hit just over $5.1 million in Q3, up from $4.73 million in Q2, while condos sold for $907,576 on average, down from $1.16 million in Q2, compared to 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 considering Whistler’s limited number of sales, Higgins cautioned, one high-value transaction could skew those figures dramatically.
(The average sale price of a chalet in Whistler reached just over $4.1 million in 2021, compared to $3.265 in 2020 and $2.861 in 2019.)
In Whistler, “Prices are easy up and sticky down,” Higgins explained. “Right now, if I can’t sell my place, I can rent it 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 aren’t going to change. So [sellers will] just wait.”
To that end, while buyers might have more time to assess their options, that doesn’t mean there’s an abundance of options to assess in the first place.
According to WREC, Whistler’s inventory rose about 29 per cent from Q2 2022, but is still trailing 37 per cent below the resort’s 10-year inventory average.
With about 234 listings in Whistler and 60 in Pemberton as of last month, “in terms of inventory, we’re still historically low in both” communities, said Higgins.
“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 creeping up, but the pace of sales has slowed down. We’re not selling at the same pace … as this time a year ago.”
Higgins said he expects to see sale volume pick up in Q4, with Whistler’s market fortified by its limited supply and substantial demand, particularly as tourists return to the resort in droves. “We always see interest in October, November,” he explained. “There’s still interest there for people who want to get a hold of 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), Whistler’s dearth of rental availability could also play a role in driving property sales.
Amid a lack of pressure from Vancouver buyers, the price of Whistler properties, on average, is probably “not going to go up,” Higgins conceded. “But a levelling out, that all depends. That’s when it’s very market specific—if you’re looking for a ski-in, ski-out place on the mountain, that’s always going to be [a property] people want to get.”
Perry said she similarly isn’t expecting to see any “sharp drops” in prices, “because we are so highly desired worldwide and we have such low inventory to offer,” she noted.