The road to Whistler is paved with homebuyers as the 2010 Winter Olympics approach, say real estate agents and developers who operate in communities along the Sea-to-Sky Highway.

Activity has increased sharply since Vancouver-Whistler was awarded the Games and the province decided to expand the highway between West Vancouver and the popular resort, say industry insiders, who are banking that activity will remain strong until the Olympics and beyond.

"The highway has already made a huge impact," says Dale Falconer, a Lions Bay-based real estate agent who specializes in the Howe Sound area.

Falconer says the average price of a home in Lions Bay has jumped to $900,000 from $600,000 in the last two years. He expects prices to keep rising as the highway improvements extend to Whistler.

"The new highway has created a lot of attention, not only in B.C. and Canada but throughout North America," says Falconer. "Over 50 per cent of (buyers) come from places outside B.C. - from the U.S., Eastern Canada and from Europe.

"There's a big shift in terms of people buying in Lions Bay. Prior to the last two years, easily 70 per cent of the people buying came from Greater Vancouver."

Most buyers plan to live in the homes, either full-time or part-time, rather than use them for investment purposes. Falconer says sellers are still selling for the usual reasons - such as to downsize or relocate because of a new job - while some owners are holding off until the Games get closer in order to get a high price for their properties.

"Some are selling now because they feel the market has not peaked but is leveling off a little bit," says Falconer.

There was always a heavy turnover, he adds, but activity has been "unusual" for the past two years because of the highway expansion and the hype surrounding the Olympics. The Guardian newspaper in England recently rated Howe Sound as fifth most scenic route in the world.

Squamish-area agents say prices have levelled off after they spiked when Vancouver-Whistler was awarded the Games, but activity remains strong.

"In some ways, it's similar to the activity we had after the announcement in 2003," says Marianne Wilson, an agent with Squamish-based Royal LePage Black Tusk Realty.

But Wilson says the 2010 Olympics are not driving the current activity. "What the Olympics have done is make people recognize where Squamish is," says Wilson.

She attributes the current strong market to the Sea-to-Sky Highway improvement project; Squamish's proximity to North Vancouver; Sea to Sky University, a private institution that is under construction and slated to open in September; and the community's family-based and healthy, active, outdoor lifestyle.

"The highway-improvement project is huge because it's making the commute from North Vancouver to Squamish very easy, and the bulk of our buyers are people who are coming to work in North Vancouver," says Wilson. "So we really are contributing to that bedroom-community aspect of things."

Wilson, who grew up in Squamish and has been selling real estate there since 1987, says the community's anticipated population growth to 20,000 from 17,000 is driving more development.

"We have a lot of townhomes coming online, and for the first time in several years we have some commercial development," she says.

Lions Bay's Falconer says the highway improvements will make the Howe Sound region more attractive to people who previously dismissed the idea of buying there because they felt it was too far from Vancouver.

"Right now, I have people locally and internationally who would like to buy there, but there is very little on the market," says Falconer.

He says the area's housing inventory is very low compared to the past several years, but agents and developers are having trouble figuring out why.

"I think it's almost a B.C. thing right now," says Falconer, adding demand is high across the province because the province's economy is considered strong and owners feel confident about their real estate investments.

According to the Real Estate Board of Greater Vancouver (REBGV), only eight houses were built in Lions Bay between 2000-2005.

Last year, 26 houses sold through the Multiple Listing Service (MLS) at an average price of $839,996, with sellers receiving 97 per cent of list price, on average.

Falconer expects most future activity to occur between West Vancouver and Squamish, because there's not much existing housing between Squamish and Whistler, and he's not aware of any new development-permit applications north of Squamish.

REBGV data indicates MLS prices in Squamish rose significantly in 2005. Prices of single-detached homes climbed 16 per cent to $395,002, while townhouse prices went up 11 per cent to $273,018 and apartment prices jumped 17 per cent to $167,883.

Single-detached homes drove most of the 2005 growth as their sales increased 23 per cent.

Robyn Adamache, a Canada Mortgage and Housing Corp. market analyst who monitors the Sea to Sky Corridor, says housing starts in Squamish have maintained upward momentum since they more than doubled to 185 units in 2003 from 2002. Last year, housing starts jumped 25 per cent to 248 units.

"Most of the growth seen in the past five years has been on the side of multiple-unit construction, which accounts for the lion's share of new homes started," says Adamache.

"There have been many new multiple projects that have gotten under way in the past couple of years, from Furry Creek (a community near Britannia Beach) to the university development in Squamish."

The District of Squamish recently chose a developer to redevelop the waterfront over the next 15 years, but most of the projects won't be complete until long after the Games are over.

Several housing projects are under construction or in development stages while other major recreational, institutional and recreational projects, including the university and Garibaldi Springs Golf Course, contain housing components.

The Garibaldi at Squamish ski resort is also planned 13 kilometres north of the townsite, while major commercial projects include a proposed 85,000-sq.-ft. Wal-Mart store that fronts the highway and a proposed factory outlet mall.

Real estate developer Michael Hutchison of Squamish-based Bethel Lands Corp. Ltd. agrees the Olympics and highway improvement have sparked development in the area. Little activity occurred before Vancouver-Whistler was awarded the Games and the highway project was launched, he adds.

Most buyers want to live in the homes rather than use them for investment purposes, he says.

"The location is far more appealing than, say, Langley," says Hutchison. "The real estate opportunities here are far greater than in Langley."

Hutchison is building Amblepath, a 71-unit townhome development on a 14-acre site that is due to be complete by Christmas, and recently completed the Elements, a 22-unit townhome development along the Mamquam River.

He anticipates there will be a spate of development between West Vancouver and Whistler as buyers seek affordable homes with an outdoor ambience.

"If you had the choice between living in Squamish or living in Hope, Langley or Chilliwack, you'd choose Squamish every time," says Hutchison.

(Monte Stewart can be reached at monte@businessedge.ca)