While we’re now in the slow season due to the simple fact that few people want to either build or move in the winter, it’s still a hot market, with contractors, sellers and landlords all doing very well. This is in stark contrast to the United States, where price drops continue in most markets, with the drops being dramatic in many cases. According to HousingPredictor.com,
“The slow down in home sales has transformed what once was an all-time boom market into the worst housing market that the nation has witnessed since the Great Depression.“
Alaska is one of the few exceptions to that general rule – while price increases have slowed, they’re still climbing, with Sitka remaining a hot spot.
One of the real estate investment opportunities that is still available in many areas is the renovation market, and that’s very true in both the Yukon and Alaska. That market includes everything from buying properties that need work to fixing up the house you currently live in. The popularity of TV shows such as Flip That House prove that a lot of people are intrigued by the concept, but the pitfalls shown on TV no doubt dissuade most.
While the greatest investment gains for renovators are made by those who can do most of the work themselves, hiring a contractor can still be a great investment if you choose every aspect of the project correctly. Cathy and I are moving in 10 days to a large “fixer-upper” on acreage near downtown Whitehorse, to start our second major reno. While it’s certainly not for everyone, we thoroughly enjoyed the first renovation and are excited about getting back to work, even if it is only a few days before Christmas.
In Alberta, although housing starts in 2008 are forecast by CMHC (the Canada Mortgage and Housing Corporation) to drop 12% due to very high material and housing purchase costs and slowing in-migration, there will still be about 42,250 new units by the end of the year. In Whitehorse, land available for residential building is getting scarce due to poor planning by government – although housing starts are down from last year, condominiums such as the one shown in the photo at the top are going up everywhere to maximize the profit on the land that is available, in the downtown area in particular.
For renters, Whitehorse is getting less affordable in recent years. Across Canada, according to CMHC, rent affordability varies from less affordable in Calgary to more affordable in Toronto. In Whitehorse, the vacancy rate is 4.0% and the median rent $700 per month, but in some areas such as Granger (where we live currently) the vacancy is consistently 0.0%, and although there are some relatively low-cost rental units there, there are also many in the $1,500-$2,000 range.
While it’s easy to buy into the general “doom-and-gloom” reports, always keep in mind that there are opportunities available in every market if you look around and do your research!