Market Analysis

Salt Spring Island real estate in depth monthly analysis by Sea to Sky Properties’ broker, Li Read

March 2020, Salt Spring Island Market Analysis

Salt Spring Island

Gulf Islands Preserve

In our “always on” era, perhaps the value in a Gulf Islands form of governance (the Islands Trust) is going to turn out to be the preservation of a past lifestyle. Will this allow a “breathing room” for those who visit or live on a Gulf Island?

The Islands Trust is a provincial government body, created in 1974, with a mandate “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. This goal was successful. The Gulf Islands are park-like areas. Growth was controlled via severe zoning/bylaw restrictions, put in place in 1974.

Two trustees are elected per island, at civic election time. Planners (from Victoria) administer. Along with the Trustees, the governance model also includes, for the southern Gulf Islands, the CRD (Capital Regional District), in Victoria. A CRD director is also elected at civic election time (four year terms).

In being a part of the Capital Regional District, the Southern Gulf Islands are considered urban entities, although very rural areas in character. They are noted as rural on tax assessments. In being characterized as urban, under CRD, many government funding opportunities open to rural regions are not available to the Southern Gulf Islands. Again, the CRD burocracy is mainly focused on Victoria concerns.

After a recent two year governance study, Salt Spring voted on whether to become a Gulf Islands municipality (following the lead of Bowen Island). The Trust would have remained in place, but planners would have been replaced by locally elected council/mayor, and many CRD files would also have been under such elected representatives. All tax monies raised on Salt Spring would have stayed on Salt Spring. In September, 2017, Salt Spring voted (63%) to leave things “as is”. Effectively, the island remains in 1974.

In 2020, the inadequacies of 1974 ideas can be seen. Many different groups are meeting and trying to make inadequacies “work” under the old system. Lack of affordable housing/work rental is only one outstanding item.

In our always connected/never off world, perhaps being able to drop into a 1970s experience will act as a restorative function…along the lines of the Japanese concept of forest bathing.

Salt Spring, with its natural beauty, its small Village atmosphere in the few designated commercially zoned areas (zoning was set in 1974, remember), and the overall non-growth policy for the Gulf Islands, may now have created a place for one to be restored to basic humanity. Now: it may be beyond just preservation of a natural world and have evolved into preservation of the human psyche. Could be…like a pocket place…a withdrawing chamber. Hmmm…..

Technological Advancement

Virtual reality, augmented reality, 5G & beyond speed of connectivity, artificial intelligence, machine learning, the expanding Internet of things, 3-D printers…is the shock of dropping into 1974’s ethic the “change that is as good as a rest”? Would it be like the “time out” offered to over-active children? A way to rediscover our true selves?

Hmmmm….maybe add this restorative quality to promotional marketing about the preserved natural beauty of the Gulf Islands?

Meantime: all real estate market indications are still pointing to seller’s market conditions. This simply means few listings and many buyers…which usually (by the end of such a cycle) lead to higher prices.


From the Beginning of March

Residential

At the very beginning of March there are

  • 87 residential listings, not separating out waterfronts, farms, oceanviews, or acreages
  • 48 of them are listed between 269,000 – 999,800
  • 29 of them are listed between 1,035,000 – 1,900,000
  • 8 listings between 2,125,000 – 2,999,900
  • 1 listing is at 3,499,900
  • 1 is listed at 6,688,900

Land & Acreage

At the very beginning of March there are

  • 81 land listings, not separating out waterfronts, farms, ocean view, lots, acreages
  • from 139,000 to 3,135,000

Commercial

  • 16 commercial listings on the market, at the beginning of March, some of them are business only options and others are land/business opportunities
  • range between 175,000 and 15 million

Solds To Date

  • There have been 20 “solds to date”, at the beginning of March.
  • The sales range between 156,000 and 1,840,000.

The listing inventory remains exceptionally low. As soon as one delineates the price and type of property being sought, it immediately becomes clear just how few the choices are for a buyer. Current listings (houses and land together) add up to: 168. In a more “normal” market, one might see a total of houses and land listings around 380.

Low inventory times need creative seeking on the part of a buyer.

Should I Move to Salt Spring

To move to Salt Spring is a choice. Like all secondary home areas, the Gulf Islands are discretionary regions. No one “has to” move to Salt Spring or another Gulf Island. Competition exists from nearby Vancouver Island communities. This means that a seller will look seriously at a buyer’s best offer.

Meantime…whether a visitor or a resident…enjoy the opportunities of March. Home and Garden show is offering a Wellness component…discover Salt Spring’s trades and suppliers and also the vibrant alternative health options. ArtSpring showcases theatre, dance, music offerings, and gallery openings. The Ganges galleries are highlighting Spring with receptions celebrating their artists. Studios are getting ready for the season. Hiking trails beckon. The new Salt Spring Marina is ready to welcome boaters. Live music venues and special seasonal menus at our great restaurants…all part of the season’s wake up call.

Nature is erupting into its Spring moments…orchard blossoms are just one signal. Whether it comes in like a lion and goes out like a lamb, or vice versa, March is a perfect time to consider a purchase on very special Salt Spring Island. Buying now ensures enjoyment by April/May.

February 2020, Salt Spring Island Market Analysis

Signs of Early Spring

February. Longer days, bursts of Winter mingled with signs of very early Spring. Snowdrops are out, camellias budding, early rhododendrons in bloom, daffodils in bloom…early Spring is an energizing time on the great Pacific Northwest Coast and Salt Spring is a part of this…watch Nature unfurl.

Market Projections?

Market projections? Low listing inventory continues to be the main feature of the Salt Spring, Gulf Islands, and Vancouver Island marketplaces. There appears to be renewed buyer desire, and in all property types/price categories.  

It remains the case that it’s Vancouver sellers who become the main buyers in all the secondary home areas…including on Salt Spring.  

Thin inventory coupled with buyer interest usually results in price increases…buyers always set the pace in a real estate market trend.

It’s a good idea to wait for final thoughts until we see the provincial government’s February budget…will there be further measures to suppress real estate markets in Vancouver, Victoria, Nanaimo, Kelowna?  

It was the provincial government’s 2018 February budget’s taxation measures that suppressed real estate sales in the above mentioned four areas…between late February 2018 and October 2019 sales activity was correspondingly slow in the secondary home markets, too.  

For Salt Spring and the Southern Gulf Islands, the outcomes in Vancouver’s market are still the statistics that strongly influence sales here.  

Geopolitical Events Influence

Geopolitical events influence all markets…one cannot ignore big picture happenings. That would include world health issues.

Marshall McLuhan predicted the “global village” scenario back in the 1970s…the same decade that saw the creation of the Islands Trust, by the then provincial government.  

The result of the Islands Trust form of governance for the Gulf Islands was to cap growth. The mandate of this government body was “to preserve and protect” the environmental beauties of the Gulf Islands for the benefit of all B.C. residents.  

Intentions More Narrowly Interpreted

Over time, the original strict zoning/bylaws have been more narrowly interpreted. Growth has been controlled. This means, over time and beyond market trends, that the Gulf Islands will end by being places that one will have to be able to afford. They are basically parks. Inventory will remain low because of the Trust’s non-growth policies.  

The Islands Trust remains the form of governance for Salt Spring and the majority of Gulf Islands. These islands are governed by the provincial government’s Islands Trust body. Two trustees are elected per island, at the civic election time (4 year terms). Planners maintain the official community plan (OCP), and guide the elected officials. On Salt Spring, there is also an elected CRD (Capital Regional District) director…again, the CRD is mainly focused on Victoria issues. Who is really in charge for the Southern Gulf Islands (included in the CRD)?

After a two year study on governance models, with all such models retaining the two elected trustees and the overall Trust documents, Salt Spring voted (63%) in September 2017 to retain the current 1974 model…. The idea behind the two year study: to see if Salt Spring would become a Gulf Islands special style of municipal structure…along the lines of Bowen Island. Trust remained, but off island planners replaced by local councillors. This outcome was strongly voted down on Salt Spring.

Salt Spring offers all services/amenities for a pleasing lifestyle and it also offers excellent transportation options (3 different ferry routes, 2 regular sked floatplanes). There’s a hospital plus 3 elementary, a middle, and a senior school. An indoor pool and several health/wellness opportunities. An Arts Centre (ArtSpring) is an important creative hub on the Island. Sustainable farming is featured (vineyards, wineries, olive groves, cheese-makers, craft brewery, cideries, farmers markets). Salt Spring is a seasonless experience and offers a true year-round stand-alone lifestyle. It is easily accessible to major centres and yet is wonderfully apart. More information? Call me!

As we enter this very beginning of February,

  • there are 87 residential listings on Salt Spring, priced between 349,000 and 6,688,900
  • Forty-two of these residential listings are listed over one million.
  • There are 78 land only listings, priced between 139,000 and 2,495,000.
  • As soon as one defines a property search by price and type, it is immediately clear that inventory is extremely low. There have been 8 “solds to date”in 2020, ranging from 156,000 to 1,748,800.

Although genuinely seasonless…buyers are always around…the main grid of sales activity does tend to fall between March Break (mid-March) and the Canadian Thanksgiving Weekend (mid-October) for all coastal secondary home markets.

February: let’s enjoy the early spring side of this leap-year month. Seedy Saturday weekend will inspire your gardening ideas. The Family Day Weekend, mid-month, is a moment of reconnections. Time to rediscover hiking/walking trails? Time to do a little forest bathing? Time to remember February’s homage to romance? Whatever the scenario: enjoy!

January 2020, Salt Spring Island Market Analysis

Happy New Year!

Looking Ahead

January gets its name from Janus, the Roman god. Janus had two faces: one looking back and one looking forward.  

2020 may be the beginning of the “real” 21st Century, and change may be its signature. Artificial intelligence may be key. As we step into the beginning of this first month in a New Year, it might be best to focus on Janus’ forward seeking face.  

Real estate in B.C. continues to see significant changes in the industry itself. Real estate outcomes in major centres (Vancouver, Victoria, Nanaimo, Kelowna) continue to be impacted by provincial government suppression measures. Salt Spring’s main buyer profile continues to be someone who has sold in Vancouver and who is seeking a new lifestyle.  

Buyers Create Markets

As we enter January, on Salt Spring we note continuing thin inventory available for a buyer’s choice. If renewed buyer action continues to increase and the inventory continues to remain low, we may see price escalation by mid-2020. Supply and demand, our old economic friends, do predict price outcomes. Sellers and realtors do not create markets…buyers do that.

In January, it’s a good idea to attend financial seminars, to listen to those who make financial projections, to pay attention to geopolitical events (we are all part of a bigger picture), and then to bring our own thoughts to the table. The idea of New Year’s resolutions is really about creating a lifestyle plan. Early January is the time to be thoughtful.  

Discovery always comes in from the edges

In change lies opportunity. To see it, perhaps take time to practice periphery vision. If we just head down the prepared (by the media, by those with an agenda) channels, then we are using tunnel vision. Goes nowhere. Brings agitation. Discovery always comes in from the edges, our periphery envelope. Maybe that’s Janus’ forward-facing message? Be open? Seek future solutions? Hmmm…..

Meantime, if you are seeking a real estate outcome, whether selling or buying, on special Salt Spring Island, please call me. Benefit from my knowledge, expertise, experience…your best interests are always my motivation.

December 2019, Salt Spring Island Market Analysis

The winter season on Salt Spring Island changes from year to year…sometimes there are brief snowfalls (snow is rare and islanders love to take photos, capturing the beauty of this unexpected short reminder of the rest of Canada’s winter life).

Southern Gulf Islands Climate

Usually, though, winter on the Southern Gulf Islands is more like a long late Fall…or a prolonged early Spring…depending on one’s point of view. The micro-climate found on the Gulf Islands, known as “cool Mediterranean”, does offer a gentler winter season experience.

Real estate showings continue in this softer season, as potential buyers want to “see things at their worst”…on the theory that everything looks great in the summer…so best to check out winter.

Salt Spring offers a year-round lifestyle. There is always something happening and it’s always a good time to visit. More info? Call me!

Sales often take place in the last two months of a calendar year and into the first weeks of the new year. Possibly buyers came earlier, viewed, then went off to view options on nearby Vancouver Island…buyers like to “be sure” about their destination choice, and so it seems that an interviewing of places is now a part of that introductory search.

For some substantial time, the main buyer profile for Vancouver Island, the Gulf Islands, the Sunshine Coast, and the Interior communities has been from Vancouver.

In past years, the Gulf Islands had seen many buyers from Alberta and the U.S. These former buyers have been replaced by Vancouver/Lower Mainland potentials.

The provincial government tax suppression measures (late 2017 to late 2019), to cool real estate activity in Vancouver, Victoria, Nanaimo, Kelowna, were successful. Salt Spring action is now tied to Vancouver outcomes.

Racing to the Bottom?

The sluggish sales during these past several months may explain the several and specific price reductions from one local Salt Spring company…an effort to push action. It did not result in a big increase in sales, but did create further reductions from other local companies, in an effort to remain competitive. It may also have affected serious buyers in their offer amount decisions. It is possible, in a small area, to create a mini-market via pricing.

Unintended Consequences of Measures?

Have the government tax measures to suppress action in the city markets, ostensibly to create affordable housing, really just erased an owners equity? Will that affect an owners retirement income? Hmmm…there’s that “unintended consequences” issue again. Supply and demand create the affordability outcomes…has the government encouraged new construction of rental accommodations?

In August, for whatever reason (and perhaps global issues / geopolitics were involved), the Vancouver market began to experience an uptick in action, in spite of the provincial government tax interventions. Both September and October saw substantial increases in sales volume, in Vancouver. Sellers there began to reappear in the rural coastal regions, including on Salt Spring. Most sales remain (for the moment) in the entry level residential segment, in both the primary and secondary home marketplaces.

Contact Directly for Best Information

The Southern Gulf Islands are overlapped by three different real estate boards: Vancouver, Victoria, Vancouver Island boards are represented. A board is the portal for a realtor to input a listing onto the geographic MLS. In a “grey area” (which describes the overlapping on the Southern Gulf Islands, including Salt Spring), a realtor’s private client service will only show listings on that realtor’s board…the information is a drip feed from that board. Only partial information is available on a realtor’s private client service.

To see all available listings, a consumer needs to view realtor.ca (the geographic MLS site).

My driveby lists & “solds to date” information will also show all listings, regardless of realtor, company, or board affiliation. It’s important to me that the consumer sees everything, in order to be able to make that all-important informed decision. More info? Call me.

Inventory remains very thin…as soon as one specifies a type of property and a price range, one can see how low the current inventory of listings really is. Will this lead to price increases in 2020? An unknown. Perhaps it’s best to remain in the “now”, re purchase or sale decisions.

The Islands Trust, Salt Spring

The Islands Trust, a provincial government body created in 1974, is the form of governance on Salt Spring and the Gulf Islands. Growth is controlled by severe zoning/bylaws restrictions. Does this control of growth lead to higher property prices over time? Perhaps. The Canadian Gulf Islands are the jewels of the Pacific Coast. Over time, they may end by being places one will have to be able to afford. Low inventory (both market driven and Islands Trust no-growth policies) combined with strong buyer desire are usually a guarantee of price escalation, over time.

In June, 2018, changes to the Real Estate Services Act of B.C. came into being. Change is continuing in the industry. Questions? Just ask. The important bottom line: protection of the consumer.

Along with changes to the Act, the emergence of other purveyors of real estate information and the escalation of technology to disseminate information are both impacting the way real estate has previously been done. Stay tuned!

Seasonless Adventure Here on Salt Spring

December brings a season full of light and joy, and Salt Spring offers craft fairs, gallery openings, theatre, seasonal choral events, studios open, special menus in our great restaurants, plus local shopping delights. It is a time of traditions being celebrated and an inclusive spirit that welcomes others to enjoy with us. The leaves are off the trees, which visually opens up the hiking/walking trails…get out and about and rediscover the minimalist pleasures of this winter face. Salt Spring really is a seasonless adventure.

November 2019, Salt Spring Island Market Analysis

November is a hiatus between late October’s palette of brilliant reds and golds…leaves holding late Fall’s signature…and then the sudden bare branches…a signal of almost-Winter. Shorter days, a mix of cool sun and rain spattered windstorms. November is a grab bag of weather rhythms.

Salt Spring Island
Salt Spring Island

It remains a time when potential buyers still turn up to view properties…some saying that they want to see things at their worst…anything looks good in July. Not a bad idea. It does become a mainly weekend business, though, at these closing weeks of the year.

Inventory & Taxation Measures

Thin inventory remains a feature of Salt Spring’s listings. As soon as a buyer specifies price and property type, it’s clear that there is not a lot of choice.

The current provincial government set out, upon election (late 2017), to suppress the buoyant real estate market in Vancouver (and then in Victoria, Nanaimo, Kelowna). Various severe taxation measures were brought in…including a 20% offshore purchase tax…and a speculation (vacancy) tax. Their idea was that this suppressing of a market would make homes more affordable in the four affected areas and would also open up more rentals.

Between late 2017 and late 2019, a pause in sales developed…due to these government measures. The secondary home marketplaces also paused. Vancouver sellers had become the buyers in rural areas, including on Salt Spring.

Brief Recovery Period

The very brief recovery in the secondary home regions in 2016 (five months only on Salt Spring), after the nine year downturn caused by the global economic meltdowns, had been driven totally by sales in Vancouver. Those city sellers had fanned out over the coastal communities and into the Okanagan…their brisk buying was the reason for the uptick in all secondary home regions, between late 2015 and late 2016. Then: government tax interventions totally stopped the real estate recovery.

Recently…

Recently, (August/September), after a two year decimated real estate market because of the government’s taxation measures, Vancouver began to show a slow improving sales trend. Salt Spring usually sees a corresponding uptick in activity within 3 to 4 months of a Vancouver outcome.

There may be many reasons for Vancouver’s improving trend, including geopolitical issues, but, for some substantial time, Vancouver sellers have been the majority of buyers in all the coastal secondary home markets.

Reflecting the government suppression pauses, some local companies engaged in severe price reductions in 2019, on all their listings…trying to create a market. Few sales followed. The pause in action may not have been a price issue. If a buyer (for whatever reason) is reluctant to act…then nothing happens. A buyer activity always creates and sustains a market…this side of the transaction equation is beyond the control of a seller or a realtor.

Renewed Interest in Buying

Now, very very recently, Salt Spring is seeing a renewed interest in actual buying…as opposed to only viewing. It may be that the remaining two months of this year will experience stronger sales. Most activity remains in entry level residential options.

At the very beginning of November, there are

  • 111 residential listings, not separating out townhomes, single family, or waterfront. They range between 279,000 and 6 + million. 56 of these listings are below 998,000.

  • There are 88 land listings (not separating out lots, acreages, or waterfronts. Prices range from 148,800 to 2,495,000.

  • There have been 128 sales to date. They range from 125,000 to 2,300,000. And 99 of these sales are below 950,000.

The inventory is exceptionally low…which usually foretells a coming market uptick. With government tax suppression measures firmly in place, however, this may not allow natural market forces to play out.

November on Salt Spring sees craft fairs, harvest menus in our great restaurants, gallery openings/receptions, the Ag Alliance birthday bash dinner event, the Chamber’s Salty Awards (business & community recognitions). It’s a great time to re-encounter the hiking/walking trails network. The sailing races now take place on a Sunday afternoon (crew are always welcomed!). November is a good time to follow Nature’s pattern…a little withdrawing to nurture next steps can be a positive idea.

Salt Spring and the Gulf Islands remain good investments. The Islands Trust, a provincial government body, in place since 1974, restricted growth through severe zoning/bylaws…the idea was to “preserve & protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. Over time, escalation in value becomes a feature of protected regions.

October 2019, Salt Spring Island Market Analysis

Fulford Harbor, Salt Spring Island, BC

October begins…real Fall is with us.

On Salt Spring and the Southern Gulf Islands, real estate sales continue throughout this last quarter of the year.

Salt Spring is “seasonless” for real estate…many transactions often take place between early October and year end. Perhaps buyers viewed earlier, but they act in the Fall.

Salt Spring and the Southern Gulf Islands became strong Fall sales windows several years ago.

At the beginning of October, then, we have 117 residential listings (not separating out townhomes, waterfronts, farms…simply a residential category).

Market Statistics

  • 62 are listed between 239,000 (a Brinkworthy Park mobile) and 998,000 (a renovated tidal waterfront cottage-home).
  • 42 of these are listed between 1,020,000 (an updated character home on 10 acres) and 1,999,900 (a cottage on 30 acres on Blackburn Lake).
  • 9 residential listings are between 2,150,000 (architect designed waterfront) and 2,999,900 (two adjacent waterfront
  • lots, architect designed home).
  • 2 of the listings are 3,499,000 (for a view home with cottage on 4.95 acres) and 3,895,000 (waterfront home with studio).
  • 1 listing is an 84 acre farm, potential subdivision possibility, asking 6,688,900.

At the beginning of October there are 90 land listings (lots or acreages…not separating out waterfront or farms)actively on the market.

  • 28 of these are listed between 148,800 and 299,000.
  • 25 parcels are listed between 309,000 and 499,000.
  • 30 properties are listed between 519,000 and 995,000.
  • 5 parcels are listed between 1,020,000 and 1,395,000.
  • 2 are over 2 million asking (2,150,000 and 2,495,000…both are very large waterfront acreages).

At the beginning of October, the solds to date number 125:

  • 35 were selling between 125,000 and 494,000.
  • 18 sales were between 515,000 and 589,000.
  • 15 sales were between 601,000 and 699,000.
  • 13 sales between 712,000 and 794,000.
  • 10 sales took place between 800,000 and 894,000.
  • 7 sales took place between 900,000 and 950,000.
  • 26 sales between 1,000,000 and 1,837,500.

Of these

  • 13 were waterfronts.
  • 8 of these were very large acreages/farms.
  • 17 of the 26 sales over a million sold below 1.275.
  • 3 of the 26 sales over a million sold between 1.375 and 1.438.
  • 6 sold between 1.6 and 1.837,000.

There was 1 sale over 2 million (a waterfront point that reduced from 3.1 to 2.6, and sold for 2.3 (in late September).

Chasing Down the Market. Helpful?

We have two natural annual pause periods in our secondary home/discretionary market. One is late May/early June. The second is late August. A local real estate company severely reduced prices on almost all their company listings, in early June. Other companies did not follow suit. The same company further severely reduced their company listings in late August…and another company did follow suit. The same company brought in further reductions in mid-September. It appears that only two such reduced listings have sold (in September).

The listing inventory remains very thin. Generally, Salt Spring might see between 380 and 420 residential listings available (residential and land). As we begin October, we have a total of 207 listings for a buyer to consider. As soon as a buyer criteria includes price and type, the scarcity of listings is very apparent.

Taxation & Policy Measures

It is clear that the various taxation measures from the provincial government, in 2018/2019, to suppress real estate markets in Vancouver, Victoria, Nanaimo, Kelowna, have worked.

The Vancouver market had been the main propeller of a sales recovery in the Gulf Islands (between early 2016 & early 2018)…it was the same in all the secondary home markets. The further faltering in Vancouver, because of provincial government tax interventions, directly affected sales on Salt Spring and the Southern Gulf Islands. More information? Call me.

Patience is Key

Patience on the part of a seller is always necessary in all secondary home markets. The buyer has to first choose “for” a specific location before deciding on a property. Time lags are a part of this view/think/choose/buy scenario. When government measures intrude, time delays can further escalate.

So…going forward? In spite of the provincial government’s suppression measures, there seems to be a resurgence in Vancouver sales activity. Geopolitics create larger markets and no area is immune to events in Asia, Europe, Americas. Coastal B.C. and the city of Vancouver offer a pleasing destination. A Vancouver seller remains the principal buyer in the secondary home areas.

Meantime: October brings lovely crisp days, mingled with rainy weather patterns. It’s a Harvest season on special Salt Spring. The Saturday Market and the Tuesday Market are still occurring. The Canadian Thanksgiving in mid-month, special harvest menus at our great restaurants, farm-gate stands are open, the annual Sip & Savour takes place (showcasing local fare), and music and theatre presentations are underway (ArtSpring, Folk Club). SSNAP (Salt Spring National Art Prize) continues (Mahon Hall). Wine tastings, cideries, craft brewery…live music venues in Ganges…and hiking/walking trails beckon. Enjoy!

Seeking a property on special Salt Spring? Benefit from my knowledge and expertise. How may I help you to discover and to buy your Gulf Island property gem? Call me.