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River Bend homes likely to be taken off market

Only one market home sold in Cheakamus Crossing but Whistler still paying off loan



The market homes at Cheakamus Crossing's River Bend neighbourhood will likely be taken off the market at the end of November.

"We just don't feel there's a market. The real estate market right now is not active enough to continue to sell them," said Joe Redmond, president of Whistler2020 Development Corporation (WDC). "I think the agents have been down there and some people have come by but I don't think the market is strong enough."

The 20 market homes are selling for between $850,000 and $950,000 and have a total value of about $17 million. Only one home has been sold in the neighbourhood since they were made available in May.

Undeveloped market lots are also for sale, two of which have been sold.

The municipality is counting on the sale of the market homes to pay back the remainder of the $100 million loan that was taken out to build the athletes' village. Payment is due in November 2011 but Redmond said all but $13 million of that loan should be repaid by the end of this month.

Redmond said the WDC is not concerned that the unsold lots will have a negative effect on the repayment.

"The beauty of what they have is they have assets that far exceed the value of the loan," Redmond said. "There shouldn't be a problem in refinancing it because they know the value is there. It's really waiting for the market."

Resort Municipality of Whistler CAO Bill Barratt said the municipality will likely refinance the loan next year if the homes are not sold.

The WDC board had discussed lowering the prices of the homes but decided that pricing of the homes was not the issue. Market instability and lack of buyer confidence are felt to be the main reasons why the houses aren't selling.

The problem is not the nearby asphalt plant, with Redmond pointing out that most of the people opposed to the plant have still moved into their WHA-regulated homes. Nor is distance from the village an issue.

"There's the perception that it's too far away, it's a great distance away from the village and, you know, I think that's more of a perception than anything else," Redmond said.

However Pat Kelly, owner of Whistler Real Estate, said that there's less buyer interest in areas moving away from the village.

"The fringes of our community have always been more difficult to sell than in the central part of the community," he said.

Kelly said that interest in the River Bend homes has been strong since May. The reason the homes aren't selling is due mainly to macroeconomic issues of buyer confidence.

"The market has changed," he said. "It's different and it's creating a new framework that buyers and sellers need to work within. In the case of River Bend, this seemed to be reasonable time in light of objectives of WDC and ultimately their shareholders in the municipality, that this was a good time to not be in the marketplace."

Kelly said the buyer demographic has shifted since the recession hit. Now, potential buyers are more lifestyle oriented who are contemplating living in Whistler full time or, if not living full time now, then moving here at some point in the future.

"They're doing their diligence and they're ensuring that they're making the absolute best decision not just for today but also for tomorrow. Their decision-making process is a lot longer and with the amount of opportunity that's out there right now it means that people are going to have their homes for sale for much longer periods of time than they originally expected," Kely said.

"There are people making decisions today, it's just not the decision that people would like or have been expecting."

Whistler home sales in the fall months typically slow down since there are far less tourists in town, Kelly said. As more people visit during the winter there is typically a greater chance of making sales.

"I don't expect this to be a permanent thing," Kelly said. "I expect that once we get back into tourist season, we'll probably be back on the market at some point in early 2011. That's my hope and consistent with my understanding of how the market works."

Redmond said it's "premature to even think about" turning the market homes over to the WHA to sell as resident-restricted homes.

"You could certainly do that but you wouldn't get the value for them," he said.