Charlie Smith, Georgia Straight, July 19, 2007
About 20 years ago, Jack Lessinger, a retired University of Washington professor, introduced the term penturbia to readers of the Atlantic Monthly. Penturbia was the fifth great region of colonization in the United States. This followed the movement into the central and southern colonies, then into the Mississippi and Ohio river valleys, then to the great industrial cities, and next into the suburbs of America. Penturbia was beyond the normal commuting range of big U.S. cities. It included areas replete with farms, forests, lakes, and rivers. In penturbia, there were plenty of opportunities for fishing and golf.
In 1990, Lessinger followed this up with a book, Penturbia: Where Real Estate Will Boom AFTER the Crash of Suburbia (SocioEconomics, Inc.). He classified every county in the United States according to its appeal to those wishing to flee cities and suburbs. Lessinger missed the mark with his prediction of a real-estate crash in the suburbs. But his forecast about the rising popularity of rural real estate has come true in recent years, particularly in B.C.
Just ask Rudy Nielsen, the New Westminster–based president of the NIHO Land & Cattle Company Ltd. For the past 40 years, Nielsen has been selling recreational properties across the province. Nielsen defines B.C.'s penturbia on the basis of how many hours it takes to reach it by car from the Lower Mainland.
"Prices on land go by the hours you have to drive," Nielsen told the Georgia Straight. "The four-hour circle is very high-priced."
He says a waterfront lot on Nicola Lake, which takes about four hours, could cost $800,000. However, a similar lot in Vanderhoof, which is 11 hours away, is available for only $60,000.
On July 17, Statistics Canada revealed that B.C.'s population has aged significantly in recent years. According to newly released data from the 2006 census, more than half the population was over the age of 40.
There are big implications for the recreational-property market, which lures older buyers. Nielsen provides a profile of the typical person interested in penturbia: a blue-collar worker who bought a small house 30 to 35 years ago in Vancouver, Burnaby, or New Westminster for about $35,000. Since then, the value of that property has risen close to $1 million.
"He wants to get away from the traffic," Nielsen said. "He wants to get away from people honking horns at him."
So he sells his house and moves to Kamloops or Vernon. He ends up with another $600,000 to $800,000 in his pocket, which supplements his pension quite nicely. And he buys an aluminum boat and a motor home.
Nielsen said this theory of the rising popularity of penturbia has been shaping how he has run his business for years. And the numbers appear to bear it out. Besides NIHO, Nielsen also owns a company called Landcor, which tracks every property sale across the province.
Five years ago, Nielsen said, there were 90,000 such transactions across the province, involving $19 billion worth of property. In 2006, sales reached a record $54 billion on 160,000 transactions. In 2006, 94 percent of the sales involved British Columbians buying property from other British Columbians.
"Just under $2 billion was from Alberta, which was about a 45 percent increase from the year before," he said. "The market has shifted from Calgary to Edmonton and Red Deer."
Nielsen estimated that buyers from the Calgary area have snapped up about 90 percent of the recreational properties in the Invermere and Radium Hot Springs areas, which are within easy driving distance through the Crowsnest Pass. Edmonton buyers are focusing on the Central Interior.
Now, there is a shortage of available property in B.C.'s penturbia. Nielsen explained that there are 1.7 million land titles in B.C., and that 1.3 million of those are for standard residential properties. That means there are only 400,000 land titles for recreational, commercial, and industrial properties across the entire province. The Crown owns almost 95 percent of the land in B.C.; the rest is privately owned.
Nielsen said government officials should make more sites available. "They should bear in mind there are more blue-collar workers than white-collar workers," he said. "They've got to keep their prices in line so it's not only for the very, very wealthy." After 40 years in real estate, Nielsen hasn't lost his common touch.
Contact Information: #200 - 313 Sixth Street, New Westminster, BC V3L 3A7 CANADA
Telephone: 604-606-7900 | Toll Free: 1-866-987-NIHO | Email: [email protected]