A Personal Reflection:
Princeton’s hot real estate market continued for 2017, driven mostly from a frantic lower mainland that’s literally bursting at the seams and spilling into BC’s South interior.
It’s been amazing to see a market in the lower mainland that was so strong and positive in growth, that has now turned into a negative force of nature as perceived by the public. Much of the frustration was drawn from foreign buyers where, according to Stats Can and CMHC, made up 7.6% of purchases in Vancouver last year. Other causes for a relentless market included changes to mortgage regulations that lowered a buyer’s purchasing power, government immigration policy for continued population growth and the simple fact that Vancouver physically doesn’t have the available land to sprawl out. The public’s outcry for housing affordability is understandable though, as the dream to own a home for many in Vancouver will remain just a dream in the foreseeable future.
This unprecedented market has driven many buyers to compete for the same “affordable” homes like condos and townhomes, resulting in elevated prices and rentals that are unattainable for many. This phenomenon has forced buyers to push further out into the Fraser Valley and beyond. Some are accepting the longer commute times and some are completely uprooting and looking for a better quality of life elsewhere like the southern interior of BC.
The Mass Exodus
As many migrate out of the lower mainland people are looking for an affordable lifestyle with low crime rates that will allow them to spend more time with friends, family and nature. The search for a better lifestyle has created a new attraction to smaller communities.
With today’s technological advances in communication, many millennials are taking advantage of the ability to work at home. This eliminates commuting to work and provides them options to move to other areas. Although a US study, this MarketWatch news article has a good explanation as to why the new trend to smaller communities is happening:
Popular B.C. interior cities like Kelowna are already becoming out of reach for buyers, as are other popular destinations like Kamloops, Vernon and Penticton. This is drawing people to small cities such as Salmon Arm, Osoyoos and Oliver. As affordable housing disappears throughout south B.C. people are now looking at smaller towns like Princeton.
What About Us?
The influx of buyers moving to Princeton resulted in limited housing availability, both for buyers and renters. Home sales here grew by 9% in 2017 while prices have increased, on average, by 11%. These numbers indicate the challenge for our municipality to consider new housing developments to maintain affordability and increase the tax base to pay for higher demand on existing infrastructure.
Other challenges we can expect in 2018 will be the limited amount of housing inventory for buyers and more government regulations for our real estate industry. Other issues could be increased taxes, interest rates and cost of living that limits first time buyers from entering the real estate market.
It’s been a tireless year for us at Century 21 Horizon West as well. The Princeton office saw a 22% growth in sales year over year. Century 21 continued it’s growth of diverse real estate professionals by recently welcoming Ashley Tullis to our real estate team. She’s provides us with years of residential and commercial experience from the lower mainland. Our Keremeos branch has hit the ground running for 2017. This was our first year open for business and it’s been a great success thanks to the professional sales and consultation from our Keremeos expert, Terese Cleminson.
Princeton has forever been the sleepy little town that we all enjoy. It is what attracts us here and is what many wish to remain unchanged. But as people continue to migrate out of the lower mainland, small towns like Princeton will continue to increase in popularity. As demand increases in the area, you can trust our experience, dedication and outstanding client service will help you get the best possible price or help you find that hidden gem, so you can spend a little more time enjoying our wonderful playground that we call the Similkameen Valley.