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REAL ESTATE MARKET IN AND AROUND OSOYOOS SLOWLY RECOVERING AFTER THE TERRIBLE RECESSION OF 2008
Following several lean years directly related to Canada’s worst recession in decades, the real estate market across the South Okanagan appears primed for a rebirth.
Here in Osoyoos, local realtor Allan Taylor says the market is still recovering from the recession of 2008; however, there are many indicators that much brighter days aren’t far away, noting this is a “terrific buyer’s market as many homeowners had no choice but to lower prices over the past three and four years due to a very stagnant market.”
With major new developments like Osoyoos Cottages on the Lake, Gallagher Lake Village Park, Canyon Desert Golf Villas and the pending development of Phase III of the Spirit Ridge Resort and Spa, there are developers willing to gamble that the next few years are going to see a return to prosperity and high demand in the region’s real estate market, said Eric Van Maren, the owner and president of Osoyoos Cottages on the Lake.
His company recently invested roughly $100 million to build 284 homes on the north shore of Osoyoos Lake, about 20 minutes from downtown Osoyoos. Only two months after four model homes were opened for the viewing public, the development has now sold more than 30 homes and he remains very confident dozens more will be sold in the next year, said Van Maren, who has been building homes and subdivisions in British Columbia for more than 30 years.
“We believe we have one of the most unique and beautiful developments being built in the province,” said Van Maren. “We also believe the South Okanagan is going to be a destination point for people looking to purchase a home in one of the most beautiful places in the province.”
Interest rates and housing costs remain attractively low and, as a result, buyers are starting to see that buying property is a good investment once again, said Jim Gardner, the developer with Maximum Modular Builders in Gallagher Lake Village Park – a single family home development where 100 new modular homes will be built in the next two-to-three years near Gallagher Lake, located five minutes north of Oliver and 20 minutes south of Penticton.
“The biggest draw to the South Okanagan is the lifestyle,” said Gardner. “Business owners are choosing to set up satellite offices in the South Okanagan so they can live and work where they play. The region boasts some of the best lakes, wineries and golf courses in Canada.
“People want to live here and they want to retire here. They are going to want new houses to live in. That’s what our development is all about.”
Over the past calendar year, Gallagher Lake Village Park has also sold roughly 30 homes, which range in price from $170,000 to $235,000.
“We have had phenomenal momentum with sales and interest from clients all over British Columbia and Alberta,” said Gardner. “They are extremely impressed with the quality of our modular homes, particularly at such an attractive price point.”
Spirit Ridge Phase III is being called The Residences. They have sold more than two dozen units in the past eight months and expect to sell many more once construction begins in earnest this coming spring, said Curt Jansen of Bellstar Realty, which owns the Spirit Ridge Resort and Spa.
“Many snowbirds appreciate the security the Canadian health care and banking systems offer, so purchasing a home in Canada’s warmest region is a win-win situation,” said Jansen. “Many want to spend half the year in Canada and the other half down south.
“Prices in the Okanagan are quite reasonable. People can sell their homes in Vancouver, Calgary or Edmonton, buy a home in the Okanagan and have plenty of cash left over to enjoy a great lifestyle.”
This year has seen market resurgence in the South Okanagan, he said.
“The key ingredients influencing this resurgence are reasonable prices, low interest rates, abolition of the HST, increased value of homes in larger centres and a building Baby Boom generation ready to enjoy a warm, safe and secure Okanagan lifestyle.”
Taylor, who has been selling real estate in Osoyoos and area for more than 12 years and has more than 30 years of experience in the industry, said the picture isn’t quite as rosy right in Osoyoos, however, there are strong indicators a “very soft market” is about to rebound after several lean years caused, almost entirely, by the national and worldwide recession.
When housing prices in Greater Vancouver drop off by nearly 20 per cent, as they have in the past year, it usually means prices will drop significantly in Osoyoos, but that hasn’t been the case over the past several months, said Taylor.
“There has been a long history that what happens in the Okanagan follows the Vancouver market, but that’s not the case this time around,” he said. “With the higher-end homes here in Osoyoos, there hasn’t been any dramatic drop in prices at all.”
While the market remains soft in Osoyoos for those looking to sell, especially luxury homes, there are almost 140 active listings in single family homes, meaning it’s a great market for those looking to purchase a home in the medium and low price ranges, said Taylor.
“The vast majority of activity is in the lower-end homes in the price range from $200,000 to $325,000 … there are so many homes in that range that you can find a very good deal,” he said. “Single family homes in this range have moved and continue to move.”
Another bonus with the local market is you can still purchase an “incredible, executive home for $500,000”, which remains very appealing to buyers from the big city who are looking at selling their homes, buying a nice place in Osoyoos and still having a lot of cash left over once their home sells, he said.
“You can still buy a gorgeous home in Osoyoos for $500,000,” he said. “In Vancouver, you’re looking at one million or even higher for a decent bungalow … there are still people looking to sell there and come here and buy a beautiful place and have all that money left over to live a very good quality of life.”
Taylor says “the local market is very close to bottoming out” following the recession and he believes the market in and around Osoyoos will continue to rebound slowly, but surely, over the next two-to-three years.
“It remains a very good time to buy a home in Osoyoos,” he said. “Things will continue to stabilize and I don’t think we’re going to see any dramatic changes for four or five years. The good news is it’s going to get better because it can’t get any worse than it has been since the recession hit the industry so hard.”
Being able to purchase a brand new modular home near waterfront property is appealing to a lot of people and that’s’ why he started the Gallagher Lake project in the heart of the recession, said Gardner.
“We started when the market was just brutal,” he said. “We didn’t’ sell a home for months, but things have turned around and taken off and there has been a lot of interest these past few months and we believe the future is very bright.”
Van Maren agrees.
His company wasn’t going to invest $100 million unless it truly believed they could sell every one of the almost 300 homes that make up the Osoyoos Cottages on the Lake development, he said.
By the fall of 2013, more than 30 homes will be built at the site and he’s confident more than 100 homes will be sold, which is a clear indication the real estate market in the South Okanagan is in for a huge resurgence after some very difficult years.