Squamish was a lot like the rest of the Lower Mainland in terms of the way the 2023 real estate market tracked, according to Andrew Lis, the director of economics and data analytics with Greater Vancouver Realtors (GVR), which was formerly the Real Estate Board of Greater Vancouver.
"The elevated interest rate situation, the Bank of Canada having raised rates significantly in order to [quell] inflation, that's meant slower sales in most markets, and Squamish is no exception by that metric," he said.
"Overall, the market is a little bit slower there at the moment."
Lis said some potential buyers are likely struggling to qualify.
"With rates being where they are, there's also the stress test being applied to it, which is an extra 2%. So it really takes a bite out of the affordability. So, it takes people out of the buyer pool. And the other issue is you're looking at those kinds of payments and so on. And people that are scaling back what their expectations are, what they might be able to purchase, and they realize they can't afford what it is they would like. They may be sitting out at the market and waiting."
Days on the market?
The median days on the market in Squamish is currently at 37 days for overall property types, but Lis said that number really depends on what is being sold and the price set.
"If you have a property that's a lower price, it's a very nice property, it's priced well, it will probably sell very quickly; if you're holding out for a very high price, your property might sit on the market for quite a while," he said.
Gauging prices
Using the MLS Home Price Index (HPI), Lis said the detached housing sales segment of the Squamish market is up about 2% year over year.
"This masks a decline from a peak point in July where the price of about ... $1.7 million and now it's down to about $1.5 million, which was a fairly significant decline from the peak point of the market," he said, noting that in smaller communities these figures can be bumped easily by a few sales, so, it isn't a perfect measurement.
Townhouses were up 2.9% year over year, according to the HPI.
On the apartment side, the MLS HPI shows that it's up 16.4% year over year from January, he said, adding in this apartment segment of the market, Squamish is up quite a lot more than the Greater Vancouver region overall.
"I do think that that is also being swayed a little bit by compositional factors, particularly as it relates to newer development and newer apartment units and townhouses selling in the area," he said.
"These being newer units, they will tend to skew to a higher price point."
Inventory
The number of homes available on the market for Squamish is low by historical standards, Lis said.
In January, there were only about 30 apartments and about 30 townhouses available for sale.
"It is a small community, that's for sure. But That's not tremendous numbers of inventory available for people," he said.
"It's a similar trend that we see across the Greater Vancouver region and other markets. This is a problem that I think is really driving a lot of the price growth that we see in markets. There just aren't enough homes for sale on the market at any given point in time in the recent past. And when the surges of demand butt up against that, that's how you get that price escalation fairly quickly because there's not a lot to look at, and not a lot of competing products, and standing inventory."
Housing starts
According to Canada Mortgage and Housing Corporation (CMHC) data, in 2022, Squamish saw 566 housing starts; in 2023, that number was 369, Lis said.
Housing start figures represent the beginning of the construction of new residential dwellings.
Each unit in a multi-family housing project is treated as a separate housing start in CMHC data.
"A significant decline from 2022 numbers, but a huge amount of starts for a small community," Lis said.
Impact of government policy
Regarding the provincial government's new housing regulations meant to speed up the number of residential units being created, Lis said it may be a while before communities like Squamish see them making a big impact.
"What's happening is the same thing that we're seeing in other larger regions; even though there may be policies coming out that are going to enable more housing, buildings in the region are faced with higher interest rates, higher construction costs, and a lot of other headwinds that are challenging the feasibility of projects in a lot of places," he said. "And in a small community like Squamish—that has already seen a significant amount of development recently—there may be a little bit of hesitation to build significantly more very quickly, just due to the various headwinds in the economy and the things that are challenging builders."
The sweeping changes meant to increase housing brought in by the provincial government include everything from restricting vacation rentals, to new requirements that local governments like the District of Squamish update zoning bylaws to allow either a minimum of one secondary suite or detached accessory dwelling unit, a minimum of three to four dwelling units, or a minimum of six dwelling units in selected areas near bus stops with frequent transit service.
Lis added that he is "optimistic" that the new policies will help enable more supply, but said only time will tell whether the policies work as the government hoped.
Looking at the rest of 2024
Lis said the real estate market is starting to see a pickup across most regions, which will trickle through Squamish as well.
For locals who are looking at putting their homes on the market this year, Lis said because there wasn't much inventory in the market, it won't take much to "tilt the market into what we call a seller's market, which puts bargaining power in favour of sellers because there isn't a lot of other options to choose from."
Lis noted, though, that if a homeowner wants to sell and remain in the community, that may be tricky.
"You are also going to be faced with low inventory," he said, adding that a similar dynamic is playing out across Greater Vancouver.
Lis said real estate economists will be watching closely to see if new listings start picking up.
In 2023, there was an interesting dynamic, he noted, where high-interest rates meant a lot of people were reluctant to come to market with their properties in the spring, which led to not a lot of inventory and then a price peak developed.
The anticipation is that Canada's central bank, the Bank of Canada, might modestly cut interest rates later this year.
The GVR's new year forecast for 2024 was for a modest price escalation of 1% or 2%-ish over the course of the year, but that depends on what inventory is available, Lis said.
"Sales are starting to pick up as we're moving into the spring, but we haven't seen a corresponding increase in the new listings yet. So, this is starting to tilt the market in favour of sellers. And we're going to be watching to see if the sellers start coming off of the sidelines soon and start putting some of their product into the market. If they don't, it could be a situation where we see more price escalation in 2024."
Buyers’ advice
In terms of becoming a first-time home buyer, Lis said that simple advice stands, regardless of the market.
"You've got to first understand your budget, what you can afford. And then once you understand that, it's time to get a knowledgeable agent or someone to help you shop for a home in your price range," he said.
"Then you can shop with comfort, and you can find something that meets your needs,” he said. “The unfortunate reality we have right now is that maybe you might have to move to another community where you can afford it. And that might be particularly true advice for a place like Squamish because it's a small market."
