By Ezra Black
The latest data shows that Fernie homes are the most expensive in the region.
According to BC Assessment's newly released 2017 property assessments, the value of an average single-family residential property is higher in the City of Fernie than anywhere else in the Kootenay Columbia region.
The Kootenay Columbia region covers the southeast portion of the province from Fernie to Grand Forks and from Revelstoke to Cranbrook and includes 27 jurisdictions.
The average value of a Fernie home is $451,000, which is about 16 per cent more than the next most expensive jurisdiction in the region.
That honor goes to the District of Invermere, where the average home is valued at $380,000 followed by the City of Nelson where the average home costs $363,000.
Fernie also has the third most valuable property in the Kootenay Columbia: an acreage located at 34293 Hill Road, which is valued at approximately $4.23 million.
Todd Fyfe, owner of Fernie Real Estate Company, said the community’s property values are a function of supply and demand, low housing stock and high commodity prices.
“We are popular, what can I say? People want to be in Fernie,” he said.
The number of people who want to own homes in Fernie far surpasses the housing stock.
As of Jan. 15, there were a total of 24 single-family residential homes for sale in Fernie, according to the Multiple Listing Service system (MLS). They were priced from $299,000 to $1,250,000. Because of low inventory, there were relatively few sales in Fernie over the past few years. According to the Kootenay Real Estate Board there were 79 sales of single-family homes inside the City of Fernie in 2014, 66 in 2015 and 75 in 2016.
“Low inventory and high demand will eventually increase prices in any market,” said Fyfe. “It would be wonderful to see the creation of new housing stock in some of the new developments in a price range that can create some volume in the market.”
The low number of houses for sale discourages residents from putting theirs up for sale because. “They may not have anything better to move to at the moment,” said Fyfe. This compounds the problem.
Fyfe blamed the low housing stock on a dry spell of development for single-family homes between the construction of Parkland Terrace in the late 1990’s to when the Silver Ridge development began in 2007.
“This ultimately starved the market for land and created an inflation of pricing in the resale market,” he said.
Construction of new homes has been slow to increase because buyers need to have more cash on hand to build, rather than buy.
Commodity prices have also driven up the price of real estate. When oil is doing well, Albertans tend to spend more money on leisure pursuits including real estate in Fernie. When coal is doing well, Teck Resources is able to hire more employees and contractors, Fyfe explained.
“When oil stays high and coal stays high the market in Fernie and the Elk Valley is super heated,” he said. “When you drop the price of one of those commodities and threaten the jobs that are in that industry, you take away a large number of buyers that would typically be buying here. You can gauge the market by watching those two resources.”
Despite high prices, Fyfe said Fernie is still affordable compared to other mountain resort towns.
While a building lot in Fernie might sell for $130,000 to $250,000, a similar lot in Canmore could sell for as high as $800,000.
“I like that within a 30 minute drive to downtown Fernie there are housing prices that can fit most people’s budget,” he said. “There is good reason to be in the real estate market in the Elk Valley.”
Fyfe expects real estate prices to continue to rise as demand continues to increase and inventories stay tight.
Peter Sterling, a realtor with Remax Elk Valley Realty, said another factor contributing to housing costs is that people selling their homes want to maximize their profits so they tend to price them slightly above market value.
“That contributes to the slow steady rising of pricing,” said Sterling.
Fernie also has larger, more valuable properties than other Elk Valley communities because of its tourism industry, which would also contribute to high prices, he said.
“The tourism businesses encourage people to come here, buy a piece of property and build some pretty high-end luxurious homes,” said Sterling.
Annual property assessments were mailed across the province early this month and most Elk Valley homeowners will find that little has changed from last year.
The biggest change occurred in the District of Sparwood where the value of an average home went from $310,000 on July 1, 2015 to $283,000 a year later, which is a decrease of about nine per cent.
The value of a home in the District of Elkford increased from $266,000 to $272,000.
Ramaish Shah, deputy assessor for the Kootenay Columbia region, said any change below ten per cent indicates a stable market.
“In general, in our region the values have been fairly stable and that’s a trend we’ve seen in preceding years as well,” he said.
In the next few days, owners of more than 143,000 properties throughout the Kootenay Columbia region can expect to receive their 2017 assessment notices, which reflect market value as of July 1, 2016. Municipalities across the province will use the data to determine how much homeowners will pay in property taxes.
“Property owners … who feel that their property assessment does not reflect market value…or see incorrect information on their notice, should contact BC Assessment as indicated on their notice as soon as possible in January,” said Shah.
Overall, the Kootenay Columbia region’s total assessments increased from $37.89 billion in 2016 to $38.6 billion this year.