- Our Town
Home sales increase, property values keep sinking
The preliminary assessments of homes in British Columbia conducted by BC Assessments shows that the value of Bowen Island homes are down, yet again. A home that was valued at $530 thousand in 2011 was worth just $454 thousand in 2012. In 2013 the same house would have a value, according to BC Assessments, of $447 thousand. BC Assessment has specialists in various types of real estate: commercial, stratas and residential, who come to Bowen at least once per year to evaluate properties based on unique characteristics and in comparison against other recent sales in the area. They consider their prices to be accurate to market value on the date of assessment, July 1st of each year. Local realtors, however, still believe Bowen is worth investing in.
Bowen’s newest realtor is Barry Thomas. He says his faith in the local market is confirmed by his decision not only to move to Bowen two years ago, but to leave a lucrative position in downtown Vancouver to take on the job of selling homes here. Thomas says he sees a diversity of people choosing to live here, and he and his partner, Nicholas, are among them.
“We’re a gay couple from downtown Vancouver, but I’ve seen families move here from Winnipeg, and older people coming here from West Vancouver after cashing out,” says Thomas. “There is a major affordability factor here compared to Vancouver that makes it seriously appealing. You can own a home or land for the fraction of the price. You just have to be willing to make a lifestyle adjustment. At some point, Metro Vancouver’s going to get in on our little secret.”
Thomas says that when pricing a house, he definitely takes the assessed value into consideration, but he does not believe that assessments reflect market value.
Dee Elliot, who’s worked as a realtor on Bowen for 9 years, agrees with Thomas on this point.
“The range of what homes sell for on Bowen, in comparison to their assessed values is from 0.57 to 1.66,” says Elliot. “This is a huge range, and for me it just makes assessments somewhat meaningless.”
Elliot says that in terms of the number of homes that have sold in the past year, it appears as though the Bowen market is improving. This past year, 56 homes sold on Bowen, up from 43 in 2012. In the past decade, the highest number of homes sold was 83 in 2005, in 2008 the market took a drastic turn and only 43 homes were sold.
“2008 is the year where the idea of owning a second home became a lot more unrealistic for people,” says Elliot. “But it was only a few years ago that we started seeing houses being listed for any price under $500 thousand dollars.”
Elliot says that people buying on Bowen right now are similar to herself, more than 20 years ago when she came here.
“Young families who are looking for an affordable place to raise their kids,” she says. “When my kids were young, I was living in West Vancouver and had to find somewhere more affordable. The options were basically Bowen or Maple Ridge, and I chose Bowen and don’t question that decision. I know when my son is ready to start his family, he’ll come back here too.”
While the “affordability factor” is definitely a bonus for people who may find themselves priced out of the Vancouver market and are looking for cheaper options, the huge drop in property values over the past few years comes as a major blow to people who bought just prior to 2008.
“These people could get huge mortgages and lines of credit because their homes appraised for so much,” says Elliot. “Over time many of them have not been able to keep up with the payments - I’ve been to foreclosure court five times since November 1st.”
Mention the word to Councillor Wolfgang Duntz and he’ll tell you its an experience that can destroy a person’s Urvertrauen - the basic trust we have in the world which allows us to function.
Duntz says that Bowen is doing far better economically than a lot of the other islands within the Islands Trusts.
“We see an aging population without an income to be spending money in the local economy,” says Duntz. “They have an unsympathetic government, and there are limits to developing the local economy. Here on Bowen, we are more a part of Metro Vancouver than the Islands Trust that’s what’s keeping us alive.”
Duntz has a number of concerns about dropping property values.
“I’m a developer, so I know what it costs to develop a single lot on Bowen,” says Duntz. “It costs $350 thousand, minimum, so if the price drops below that for a lot, you’ve just lost the money and there’s not getting it back.”
Duntz says that he is happy to hear that Bowen’s real estate market is considered affordable, but that the cost of living here is still too high.
“We may have young families coming here, but how are they living? All of their money goes into daycare and ferry costs and mortgage payments. If we want to have a healthy community we need these young families, and if we want to keep them we need a thriving local economy. If you look at Surrey, people are moving there because it is the only place they can afford. And they will make a great community out of that. In 10 years, Surrey will be the place to be.”
Duntz says that if the price of affordability comes by way of wiping out people’s life-savings, it is not a healthy path for Bowen.
“It’s great to be known as an affordable community,” he says, “but if we let property values continue to drop we’ll be known as a community that empties people’s wallets.”
Hans Merkelbach, a retired financial analyst and long-time Bowen resident is not optimistic that real estate will make a good investment here, or elsewhere, for a very long time.
“Bowen can’t be compared to Yaletown, but when I look at Vancouver I see an unsustainable market,” he says. “Eighty percent of all homes in the Vancouver area are listed at over a million dollars. Interest rates will rise, because that is the only way they can go, and when that happens, people will not be able to pay down their debts.”
Merkelbach believes there will be a crash in the stock market, and in home prices in big urban centres in the near future. As this happens, he says, Bowen Island real estate values could drop further.
“It really depends on how many people lose their jobs,” he says. “But life will go on, and really, I think that here on Bowen we are better off than people elsewhere. Things are more stable here because we have community. In hard times people will help each other out - you don’t get that in a city.”