The improving economy has resulted in something not seen in the area for awhile.
Housing prices have now risen to the point where there’s a potential for a spec housing market – construction of accommodation by a builder without first having secured a purchaser.
“A builder can now hire his crew, buy his material, hire his sub trades and still see a profit and then perhaps build more,” says John Evans from Re/Max Coast Mountain. “It’s an option that’s now out there.”
Evans points to the newest set of sales statistics from the BC Northern Real Estate Board indicating the average selling price for a single residential home in Terrace and area has now broken through the $300,000 level to $307,507.
That’s based on the sales of 136 single family homes for the first nine months of 2014 and compares to the 170 homes sold for an average price of $250,157 for the first nine months of 2013. Evans points to several spec homes now under construction and a six-plex townhouse complex also under construction as examples of recent buyer options.
Older homes now selling for more than $300,000 may need a kitchen update or other renovations compared to new home construction which already incorporate modern features, he added.
In the first nine months of this year, 288 properties of all kinds worth $72.5 million were reported sold in the Terrace area, compared to 289 properties worth $65.1 million during the same period last year.
The average selling price for single family homes has steadily risen over the past several years from $218,150 for the first nine months of 2011 to $219,242 for the first nine months of 2012 to $250,157 for the same period in 2013 to that $307,507 figure for the first nine months of this year.
A decade ago, the average selling price for a single family home in the Terrace area was $127,000.
Evans did note that the pace of demand and sales is biting into the inventory available at any one time.
In January 2013, there was five and a half months of inventory on hand for sales activity at that time meaning that if no homes came on the market, the number of houses for sale would have been exhausted within that period.
That inventory figure dropped to as low as two and a half months this past summer and as of September, had rise slightly to just under three months.