It has been a challenging 16 months for the province of British Columbia, balancing the coronavirus pandemic with an economic downturn and a blistering hot real estate market! While so many things have been turned upside down since Match of 2020, the tide is beginning to turn, and this can only lead to positive trends across British Columbia.
The BC real estate market has been one of the hottest in the Great White North – and the impressive sales activity and enormous price growth have ventured beyond just Vancouver. From the Okanagan Valley to Kamloops, everywhere in the province is enjoying record gains. Another ballooning BC market? Powell River.
The Powell River real estate market has been skyrocketing to levels unseen in three decades. Because the rest of the province is witnessing an affordability crisis, homebuyers are finding new opportunities in the southwest British Columbia town that sits just outside the Greater Vancouver Area. But as sales and valuations go through the roof, how much longer can Powell River remain an attractive option for budget-focused households?
Below we dive into the numbers to see what is happening in Powell River’s real estate market, and what we can expect to see as we slide into the summer months.
Powell River Real Estate Activity Remains Fierce!
According to the Canadian Real Estate Association (CREA), residential sales climbed 325 per cent year-over-year in April, totaling 51 units. This figure has not been reported since 2004. In the first four months of 2021, real estate transactions have spiked 163.3 per cent from the same time a year ago to 158 units.
Overall, home sales were 45.7 per cent above the five-year average and 51.3 per cent above the ten-year average for the month of April.
Property valuations have also skyrocketed to all-time highs. In April, the average price of Powell River homes increased 66.9 per cent to a record high of $547,632. The total dollar value of all properties sold in April 2021 spiked more than 609 per cent to $27.9 million from the same time a year ago.
“The incredible strength in home sales persisted through April, lifting activity to the second-best level on record for this month,” said board president Neil Frost in a statement. “While we have seen a sustained increase in new supply coming onto the market, it hasn’t been nearly enough to keep up with unprecedented levels of demand. As a result, overall inventories are down to near-record lows and fierce competition among potential buyers for a very limited pool of listings has driven year-over-year price gains north of 60 percent.”
While the average home price is affordable compared to the rest of the British Columbia real estate market, valuations have jumped over the last 12 months. Could this mean that the demand for homes within this housing market may start to ease soon? It comes down to the fundamentals.
Will Powell River Housing Market Activity Ease in 2021?
In today’s red-hot Canadian real estate market, the key metrics that industry observers monitor are listings, months of inventory, and housing starts. So, how are these figures in the Powell River housing market?
According to CREA, the number of new residential listings surged 219.2 per cent to 83 in April 2021. This represented the biggest increase in new listings in the month of April in more than a decade. They are also 57.8 per cent above the five-year average and 46.9 per cent above the ten-year average.
Active residential listings slumped at the end of April, sliding 53.6 per cent to a 30-year low of 71 units in the month of April. Active listings were also 41.1 per cent below the five-year average and 61.7 per cent below the ten-year average.
The number of months of inventory clocked in at 1.4 at the end of April, down from 12.8 months at the same time a year ago. This is also below the long-run average of 6.8 months for this time of the year. This is considered one of the most critical measurements since the number of months of inventory reflects the number of months it would take to sell today’s housing stocks at the current rate of sales activity.
Additional supply could be coming to the Powell River housing market. New numbers from the Canadian Mortgage and Housing Corporation (CMHC) show that housing starts totaled 75 in the first quarter of 2021, up from 14 during the January-to-March period of 2020. Housing completions also more than double year-over-year, from 21 in Q1 2020 to 51 in Q1 2021.
For How Long Will Powell River Remain an Affordable BC Real Estate Market?
Many British Columbia real estate markets are at or have surpassed the national average of $700,000. Although near-zero interest rates have enabled homebuyers to borrow more and potentially acquire a property with more credit, affordability for most Canadians has become a dire issue. Whether it is pooling together enough money for a down payment or facing tremendous difficulty with bidding wars, the BC housing market has kicked into high gear throughout the COVID-19 public health crisis, making many markets virtually inaccessible for many hopeful homebuyers. For now, Powell River may be on the outside of the national affordability crisis. But for how much longer?