Brian Morton, Vancouver Sun, January 21, 2011

VANCOUVER -- A sharp drop in demand for B.C.’s high-end rural waterfront properties has resulted in price reductions that in some cases are substantial.

Unlike Metro Vancouver, which has seen a market rebound over the past year after a recessionary slowdown, many rural areas across the province have experienced a prolonged slowdown in sales of such properties.

As well, rich Albertans and other wealthy buyers who traditionally bought up B.C.’s recreational properties are increasingly looking south to places like Arizona and Nevada, where prices are often much lower following the U.S. real estate meltdown. That aspect is particularly relevant in the Okanagan and Kootenay regions, but appears to be less so on Vancouver Island and the Gulf Islands where similar properties in the U.S. are harder to find.

Sharleen Kneeland, the owner of Waterfront West Real Estate (www.waterfrontwest.com) in Courtenay, specializes in advertising B.C. waterfront properties, primarily on Vancouver Island and the Gulf Islands, but also in the Kootenays.

She said one of the most dramatic price markdowns was a restored character house on an acre of Denman Island westfacing waterfront, first listed in 2007 for nearly $1.5 million, which recently sold for $665,000. “It was amazing. It was a beautiful renovation.” As well, a Courtenay waterfront property originally on the market for $1.2 million, is now listed for $789,000.

And a south-facing Kootenay lakefront home on five acres is listed for $515,000. Two years ago, Kneeland said, it would have fetched $650,000.

Kneeland, who currently has about 500 listings on her website, said it’s a good time to make a great deal.

“Since the first downturn in 2008, things started to slow down for recreational properties,” said Kneeland. “[Properties] over $1 million have really slowed down and it hasn’t come back up. Some properties have been on the market since 2006 and [owners] have to sell. So, they’ve cut their prices.

“Sales are still happening, but it’s not a frenzy.”

Of her clients in the Kootenays and Shuswap areas, Kneeland said: “They depended on Alberta buyers and for them it’s just dead.”

Kneeland said some properties have been listed for over two years, but that many owners still refuse to drop their price.

Nevertheless, Kneeland said she noticed an uptick in activity in November and believes 2011 will see a better market.

Carrie Lightburn, a Royal LePage realtor based in Jaffray in southeastern B.C., knows firsthand how the waterfront market has tanked. “I’ve lost one customer, for sure, who bought a property on the other side [in the U.S.],” Lightburn said in an interview. “People are definitely looking south.”

Lightburn said the more expensive lakefront properties in her area simply aren’t moving, although prices there haven’t dropped as much as other parts of the interior.

“Nothing has been selling for 12 months. The only big one I know of was in November 2009, and that went for over $1 million. But there’s been nothing since.

“One cabin came on the market two years ago for $879,000. The last price we had was $695,000 and it still hasn’t sold.”

Lightburn said lower priced waterfront properties on smaller lakes have fared better.

Rudy Neilsen, a partner in Landquest Realty, a New Westminster-based real estate brokerage company that specializes in waterfront and recreational properties, resorts and ranches and tracks real estate sales around the province, said in an interview that while sales of rural waterfront properties have slowed considerably, prices have held up reasonably well in some regions.

On central Vancouver Island, for example, the average price of a waterfront home was $614,000 in 2010, down from $769,000 in 2008 and $727,000 in 2007.

However, in the east Kootenays where 2010 sales were less than half what they were in 2007, the average price has actually gone up although the average assessed value dropped.

Neilsen said that owners who are forced to sell are seeing steep price reductions, but many are simply refusing to drop their prices until the market changes.

“Recreational property is a luxury property,” he added. “And definitely that market has gone down. There’s some real good deals out there.”