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Whitehorse Housing Market Cools Off

An article from the Yukon News (from August 21 so a little bit older)

With house prices in the territory falling slightly, the president of the Yukon Real Estate Association says that buyers and sellers should get used to this “new normal.”

“It’s a rebalancing of the market,” said Val Smith.

“There is nothing drastic; it’s simply that we’re remembering how it used to be. Not everything sold overnight and you can’t get away with pushing your price 10 per cent every new listing. Life goes on, there’s very much a market out there,” Smith said.

New numbers released by the Yukon Bureau of Statistics show that the housing market had cooled off by this spring.

The first quarter results of the 2013 Yukon Real Estate Survey pegged the average home price in Whitehorse at $405,100, down from $417,600 at the same time last year.

There was a total of $45.5 million in housing transactions in the first quarter of this year, compared with $50.7 million in first quarter of last year.

Nationally, average home prices dropped to around $425,000 in the first quarter of 2013 from close to $480,000 in 2012, according to the Canadian Real Estate Association. A CREA report from last week showed that housing prices were relatively stable month after month, increasing slightly from June to July, and about 10 per cent higher than this time last year.

Yukon’s average prices, however, represent the largest drop of any province or territory.

But that’s because over the past couple of years, the housing market in Whitehorse had become inflated beyond what is normal or stable, Smith said.

“Maybe things are softening a bit, but it’s not crashing. The market is evolving. There isn’t anything extreme that’s causing buyers to be running away in panic,” she said.

“What we can get used to now is just plain flat, or nice and balanced; no extremes, no highs and lows. The condo development has slowed down, there isn’t much new on the go. Sales are slowing, but they are still happening,” Smith said.

Alex Kondor knows what falling prices feels like. He sold his Riverdale home on August 1, exactly one year after buying it, and took a $20,000 hit on the deal.

But while the market pushed Kondor’s price down, finding someone to buy the house wasn’t a problem.

“We talked to a realtor and they told us that the market had gone down about 10 per cent since we had bought, so they kind of gave us an asking price. We put it out through word of mouth in town and a friend made us an offer for the exact amount minus the commission,” Kondor said.

Contrast that with Kondor’s first Whitehorse purchase.

“We bought a place in 2009, right when the housing market was just crazy. We looked at the house at 5 p.m. that night, made an offer on it at 6 p.m. that night, and I remember the realtor telling us that two other people were interested in making an offer and if we were interested we should make an offer right away,” Kondor said.

They paid $303,000 for that Copper Ridge home and kept that house for three years. When they sold to move close to downtown, Kondor said he made a cool $86,000 on the property.

Kondor sold the Riverdale house not because he wanted to, but because he and his family were leaving town. He had spent the past five years working in the city’s planning department and left to take a job doing the same thing in B.C.‘s Okanagan Valley.

Whitehorse’s cooling condo market is one reason for a drop in average prices, said Smith.

Because condos are largely pre-sold, an entire development will often close in the same quarter, skewing the numbers, said Smith. And the price of pre-sold units may reflect prices from up to six months earlier, rather than reflecting the current market.

Since condo construction and sales are softening along with the rest of the market right now, it can make the falloff seem more drastic than it really is, said Smith.

Regardless, she’s not worried about the dip in prices.

“I think we’re starting to level. I don’t think there’s such a glut of anything out there that we’re going to see anything drastic in the next three to six months,” she said.