Market Analysis, January 2018, Salt Spring Island

January 2018, Salt Spring

Discover Yourself Here

January takes its name from the ancient Roman god Janus…he is depicted with two faces…one looking back and one looking forward. It’s a good image for this very beginning time of a New Year.

I often think that Salt Spring’s real estate market rhythm falls into thirds…and that November to February is one such third. The latter part of a year does seem to be continued into the early part of the next year…that Janus motif, perhaps.

2017 ended with an exceptionally low listing inventory, in both residential and in undeveloped land opportunities. Thin inventory does usually forecast price rises, and two new listings in the final weeks of last year did seem to point the way to higher price points.

New Mortgage Rules

New mortgage rules in Canada may make it more difficult for first time buyers to become home owners. For a buyer, it may make sense to connect with a mortgage broker…they can access many lenders and may be able to deliver concepts not readily available at the “big 5” banks.

One concern…these new mortgage stress test rules may mean fewer starter buyers overall, across Canada, but this may also have the effect of causing another secondary home market “pause”…first time buyers in a city might be buying from retirees…who then might retire to Salt Spring or Vancouver Island communities…is this a potential 2018 version of the August 2016 metro-Vancouver offshore purchase tax, which did affect the discretionary markets? In the main, those Vancouver sellers have become our buyers.

The Year of The Dog

In Chinese astrology, 2018 is known as the Year of the Dog…it begins the Chinese New Year, at their lunar festival. The dog is recognized as a faithful and protective character. Perhaps this loyal and protective aspect will make 2018 a more peaceful year?

Completed sales in January are often based on action in the late Fall, and so do not necessarily show a new market trend. The Spring Market usually begins by March Break, and it can take till April to truly see a market pattern in this secondary home/discretionary marketplace.

October 2018 is also a civic election year. On Salt Spring, two trustees (Islands Trust) and one CRD (Capital Regional District) director will be elected.

The September 9, 2017 incorporation vote on Salt Spring, voting 63% in favour of retaining the governance status quo, which has been in place since 1974, means that some key issues (affordable housing, lack of work rental, water moratorium, unfinished Boardwalk) remain unaddressed. As 2018 unfolds, those running for the three elected positions will be heard from. It would be good to introduce 1974 to 2018.

Another change in 2018 will involve the Real Estate Services Act of B.C. By March 15th, there will be substantial changes to how real estate is done in B.C. Ask me for details.

The Internet and its continuing evolution will also have impacts on the real estate industry. How is social media changing realtor/client interactions? What will be the role of a realtor, going forward?

So…industry changes and Internet game-changers and market uptick…marking 2018 as a very 21st century year (all about change).

I do these market reports at the beginning of each month, and updates as a month progresses are done on my weekly blogs.

There is always opportunity, no matter the market trend in play, at any given moment.

Salt Spring and the Southern Gulf Islands offer a pleasing lifestyle in a scenically beautiful area, with proximity to major centres.

That Trust “preserve and protect” mandate has brought forth a community that encourages creativity…Salt Spring is an authentic artists community.

“Discover Yourself Here” is the promotion tag line used by the Salt Spring Chamber of Commerce and it does speak to the opportunities offered on these Gulf Islands.

For a glimpse into some aspects of Salt Spring’s world, check out the Food Network’s Chuck and Danny’s Road Trip (find it on YouTube)…it highlights the foodie paradise of this Island’s microclimate, and catches the charm of Salt Spring. Another glimpse of Salt Spring is currently on Knowledge Network (Island Diaries)…done by the group behind Waterfront Cities of the World, they chose Salt Spring as one of the global islands to be highlighted. Interesting….

I look forward to meeting with you and to helping you to accomplish your Salt Spring Island and Gulf Islands real estate goals. Your best interests are always my motivation.

A New Year is a time for new beginnings and new ideas. Let’s put our faces looking forward.

Wishing you the best in this New Year!

Market Analysis, December 2017, Salt Spring Island

December 2017, Salt Spring

So…here we are at the end of a very haphazard / fits and starts year. Many pauses along the way…..and not all of them market related.

Offshore purchase tax in Metro-Vancouver in early August 2016 did stop Salt Spring’s spring/early summer (mid-March to end of July 2016) long awaited market recovery…Vancouver sellers had become our buyers. It took time for the effects of that tax to be digested (possibly until May, 2017). The tax did affect outcomes well into 2017.

The once-every-twenty-years La Niña weather pattern, that delivers a taste of “real winter” to the Pacific Northwest Coast, created cold/snow/cool/rain between December 3, 2016 and May 15, 2017…effectively erasing any 2017 Spring Market. Both tourism and real estate activity were affected.

Salt Spring Island Real Estate

Salt Spring Island Real Estate

The Summer Market did not begin in late June, as usual…it took until July 15 to kick in. A six weeks later scenario for both real estate and for the farming community was in evidence this 2017 year.

During late July and early August, there were further pauses in visitor arrivals and in real estate viewings…due to the significant smoke from Interior and Washington State forest fires that affected many coastal regions.

On Salt Spring, there may have been a further hesitation in August, as people awaited the outcome of the September 9 referendum on incorporation.

Underneath this fits and starts rhythm, sales slowly continued, especially in that entry level residential category, and inventory thinned out dramatically. Undeveloped land, water access only island properties, upper tier priced residential estate style holdings, and commercial options remained quiet.

Very low inventory, coupled with renewed buyer interest in the secondary home/discretionary regions, usually precedes a serious uptick in prices. There have been sales at list price, and also many back-up offer situations, and even small bidding wars, mostly in that entry level priced residential segment, particularly in the latter half of 2017.

Projections

Projections for 2018 are for continuing low inventory and subsequent strengthening of prices.

It’s still the case, though, that one has to first discover the beauties of Salt Spring Island and the Gulf Islands…to then choose “for” a particular island…and then to seriously look at available properties. It often takes two (if not three) visits before a sale takes place. When a property sells quickly, it often means that a buyer has already visited the island and has made that key decision to buy there.

Seasonality seems to have been erased, and perhaps that’s another feature of the Internet. Property seekers now turn up year-round. If one is interested in selling, it’s important to be displayed and then to await the buyer arrival. In the main, our buyers are not local. Apparently, property seekers are on the Internet doing their searches for about two years before they will act. Patience is definitely a part of all sales transactions, for a seller, in any discretionary marketplace.

The Real Estate Services Act in B.C. will be significantly changed by March 15, 2018. Ask me about this. The cancellation of Limited Dual Agency (in place since 1995) is only one such change. These many changes are coming into place as a result of one realty company’s “shadow flipping” transgression, in 2015, in Vancouver. A new Superintendent of Real Estate, and a newly structured Real Estate Council, will be implementing the changes. Be informed.

There is always opportunity in real estate, no matter the market trend in play at any given time. Creative responses to lower inventory can be helpful to a buyer seeking that special property. Find out what will work for you.

Market Analysis, November 2017, Salt Spring Island

November 2017, Salt Spring

Salt Spring Island, November, 2017, Salt Spring

Salt Spring Island

There’s a total of 170 listed properties (November 2017, Salt Spring) at this moment (counting only residential of all types & undeveloped residentially zoned land of all types…not including commercial or industrial zoned listings).

In a “slow/downturn” market, there can be between 380 to 420 listings (residential and undeveloped lots/acreages).

The listing inventory, since mid-March 2016 to current date, has thinned out. Mid-March 2016 was the very first sign of a small recovery on Salt Spring, after the long 8 year downturn.

It was a very slow sales volume increase, however, between then & now, with several non-market driven “pauses”.

The 15% offshore tax in early August, 2016, for metro-Vancouver, for example, also completely stopped the secondary home regions recovery…those Vancouver sellers had become the buyers on Sunshine Coast, on Vancouver Island, and on Salt Spring Island. On Salt Spring, Aug/Sept/Oct, of 2016, were “lost”.

Then: “real winter” (between Dec 3 & May 15) struck: all over the Coast. Both tourism & real estate viewings on Salt Spring were dramatically slowed.

Almost a 9 month pause, then, between August 2016 & May 2017.

The Summer Market was 6 weeks late…it usually starts in last week of June, & did not kick in until July 15, 2017. There were pauses within the summer season, as well…due to smoke from both Interior & Washington State fires…again, affected the whole Coast, but also caused significant delays in Salt Spring activity.

That 6 weeks later scenario seemed to carry into the Fall Market, too. Perhaps October was really September!

August 2017 may also have seen a hesitation in activity due to the incorporation vote on Sept 9th…several people, on either side of the question, were waiting for the vote outcome. There was a lot of off island media coverage leading up to the vote. It may have caused a bit of a “digestion” pause throughout September. Difficult to track these kinds of hesitations.

All these fits and starts sales rhythms aside, the main sales on Salt Spring Island remain below 850,000.

November 2017, Salt Spring

To date, the sales are as follows, from January 1, 2017 to October 31, 2017:

  • 21 sales between 95,000 & 199,500.
  • 25 sales between 200,000 & 299,000.
  • 31 sales between 305,000 & 396,000.
  • 43 sales between 400,000 & 489,000.
  • 30 sales between 500,000 & 599,000.
  • 20 sales between 605,000 & 690,000.
  • 16 sales between 700,000 & 795,000.
  • 12 sales between 800,000 & 899,000.
  • 6 sales between 900,000 & 950,000.
  • 25 sales between Private Island Estate.
  • 4 sales between 2.2 and 2.5.

The sales between one & two million were either waterfronts (both ocean & lake) houses, or very large farms (20 to 104 acres), or large ocean view acreages/houses. The majority of them were waterfronts.

The sales over two million were waterfronts (3 ocean & one lake), with houses.

These sale price ranges in November 2017, Salt Spring, do not include price reductions…they are the completed sale price points. In some cases, in the over a million category, there were substantial reductions at the point of a sale.

What is the main buyer profile around Salt Spring Island?

The main buyer profile is still out of Vancouver/Lower Mainland. Alberta & U.S. (used to be 50% of our buyers) are still not in evidence. A smattering appear from Ontario, U.K., Europe…but they do not always focus on Salt Spring as a final destination choice. Most Vancouver buyers are seeking to buy down, if they have achieved a good sale price at their end.

It takes time to sell any property in all the secondary home markets, and this is true of Salt Spring, too. The first step is to choose “for” the Island…and then to choose for a property. It usually takes 2 visits (often 3), before a buyer acts on a specific property.

A showings pattern is about the buyer…not about sellers, or properties, or realtors. It just takes the time it takes. Time is a very significant element in every secondary home market transaction.

Properties still remain on the market here for lengthy timeframes, before capturing a sale. Price can sometimes be an allure factor…though not always.

So…here we are…in the closing weeks of a calendar year. Low inventory in all property types and prices. Sellers often achieving list price or close to it. Back up offers in place, if not small bidding wars. A sense that 2018 will see the beginning of serious price escalation, based on that thin inventory/buyer demand scenario.

Hmmm…it does appear that in November 2017, Salt Spring and the Southern Gulf Islands have returned to the buoyant times between 2002 and 2005. A nine year downturn now being followed by a nine year uptick? Stay tuned.

Market Analysis, October 2017, Salt Spring Island

October, 2017

October is often seen as the divide between early Fall (with echoes of September charms) and late Fall (another word for early Winter, on the Pacific Northwest Coast).

On Salt Spring, the harvest season is with us: Apple Fest, Canadian Thanksgiving, Sip and Savour, Tuesday Farmers Market, Saturday Market-in-the-Park…plus the rediscovery of the softer season on this delectable Island.

Sunday afternoon sailing races, hiking/walking trails (Ruckle Park, Mt Maxwell, Mt Erskine, Burgoyne Bay Park, Channel Ridge trails), studio tours, craft fairs…these are all a part of the Fall Season on special Salt Spring Island.

Real estate discoveries and sales are a strong feature…the Fall Market can be one of the busiest of the year.

As we arrive at the beginning of October, we are noting a thin inventory of properties for sale, no matter the type or price point.

This does not mean the listings will all rush towards a buyer.

Secondary Home Markets

Salt Spring and the Gulf Islands are secondary home markets. This means they are “by choice”/discretionary regions. No one “has to” move to Salt Spring Island…or any Gulf Island.

The first visit from the mainly non-local buyer is always about the island itself…that first visit is about deciding if Salt Spring itself offers the buyer’s desired lifestyle option. If it does…then there will be a second visit to seriously look at available listings.

Often, it takes three visits before there is an offer. In a secondary home area, it simply takes the time it takes, to achieve a sale moment. Days on Market is not a relevant thing in any discretionary marketplace.

Buyers set prices and markets…not sellers or realtors.

If a buyer is not interested in achieving a property in a secondary home market, then it’s a flat sales picture.

The economic downturn (October 2008 to mid-March 2016, in our region) saw serious price reductions, few sales, and a slow recovery.

Interruptions by government (an offshore purchase tax in metro-Vancouver (where our main buyers were from) in August, 2016) and weather vagaries (a once-every-20-years La Niña “real winter”, that lasted from Dec 3, 2016 to May 15, 2017) conspired to hold up the general market recovery…there was a nine month pause in activity.

The Summer market was about six weeks late in arriving…took till July 15/16 to kick in. So…here we are…rushing into the shorter Fall Season.

In spite of hesitations, the inventory is historically small. Buyers are around. Yes, they are looking in many coastal communities…Salt Spring and the Gulf Islands have competition now, in decisions. Yes, one does have to sell the island first, before any buyer will look at listings. It remains the 2-step dance it’s always been: first, “decide for” the particular Island. Then: choose the property.

All that said, the combination of low inventory and price stabilization forecasts a market uptick in pricings. This may be with us by the early Spring 2018 market.

Add that to the Islands Trust cap on growth (the outcome of those 1974 bylaws/zoning restrictions), and the temperate “cool Mediterranean” micro-climate that encourages small holdings farming, plus the sense of safety and “apartness”, yet proximity to major centres…and one can see why there is an allure to the Salt Spring Island lifestyle.

More information? Call me. There is always opportunity for a buyer, regardless of market trends. A seller? It’s your moment. Still takes patience, though, while the buyer “considers”.

Market Analysis, September 2017, Salt Spring Island

September, 2017

Salt Spring Island

Salt Spring Island

September on the Pacific Northwest Coast is often one of the most beautiful months. A lingering summer mixes with shorter days and a back-to-school rhythm. (I wonder how many of us still think of this month as the start of a “new year”?).

In real estate, for a market overview, I always designate a year as the month I’m in and then look back to the same month of the previous year. So…September 2016 to September 2017 is the “year” right now.

After an eight year downturn, due to the global economic collapses in 2008, Salt Spring’s secondary home market finally saw an up-trend begin in mid-March, 2016.

Most of these sudden buyers were from Vancouver, and had sold their properties there to mainly off-shore buyers. Between mid-March and end of July, a sales volume rise occurred…and prices began to stabilize.

Then: at beginning of August, 2016, the then provincial government brought in a 15% tax for off-shore buyers, for metro-Vancouver. This immediately cooled Vancouver’s market and also stopped Salt Spring’s recovery…the Vancouver sellers had become the buyers in the secondary home coastal markets.

Traditionally, August, September, October are busy sales months on Salt Spring and the Gulf Islands. In 2016, there was a pause in activity, due to the outcome of that Vancouver property purchase tax. The Gulf Islands did not see that usual busier Fall.

Then: the once-every-twenty-years La Niña “real winter” arrived, and between December 3 and May 15, the unseasonably cool weather kept property seekers and tourists away. This cold weather pattern affected the entire Pacific Northwest Coast.

The Spring Market did not take place in 2017, due to the weather pattern. It seems that this year’s rhythm has been six weeks late (both in nature and in real estate action). The summer market did not start up until mid-July, and did not really hit its stride until early August.

Although most sales remain residential and below 700,000 (most really below 600,000), prices have firmed up and inventory has thinned out. Sellers are often achieving their list price and back-up offers are becoming a feature.

Some few new listings have come on at higher price points, perhaps testing the market. Both undeveloped land sales and higher end residential offerings are also now slowly finding their buyers.

It may be, then, that the early spring market in 2018 will see a continued and stronger recovery in the coastal secondary home marketplaces. Meantime: the usual steady sales pattern of late summer/fall, on Salt Spring, is currently underway.

This monthly market report is written at the beginning of a month…updates as the month proceeds are found in my weekly blogs. At the end of August, then, sales on Salt Spring were:

  • 1 at 95,000
  • 19 between 112,500 & 199,500
  • 20 between 200,000 & 299,000
  • 24 between 305,000 & 396,000
  • 36 between 400,000 & 489,000
  • 28 between 500,000 & 599,000
  • 13 between 605,000 & 690,000
  • 12 between 700,000 & 770,000
  • 10 between 800,000 & 899,000
  • 2 between 900,000 & 945,250
  • 21 between 1,000,000 & 1,900,000
  • 4 between 2,200,000 & 2,500,000

Most buyers remain from Vancouver. A few Ontario buyers are also beginning to reappear. Our traditional Alberta and U.S. buyers are still not in evidence.

September also brings with it the referendum for Salt Springers to decide if the Island will become a Gulf Islands municipality (the Trust remains, with two elected trustees, and others would be elected to act as a mayor and council) or whether to remain “as is” (planners appointed from Victoria). Several years ago, Bowen Island chose this specialized type of Gulf Islands municipal structure.

September further brings with it the first legislature sitting of the new coalition provincial government. Both these parties suggested, in the last election, that the offshore property purchase tax should be brought in throughout B.C.

Hmmmm…outcomes in September, thus.

September is the harvest month…farmers markets and farmgate stands offer the largesse of the season. Fall Fair is a part of Salt Spring’s September pleasures. A reconfigured Sip & Savour will be enjoyed.

Salt Spring and the Southern Gulf Islands have benefitted from a renewed visitor discovery. Travel writers, foodie publications, and adventure maps are showcasing this delectable part of the Coast.

With a temperate micro-climate, an interesting and interested population, with an authentic artists community, and an inspiring natural world (and in the heart of some of the best protected boating waters in the world), Salt Spring enjoys a year round lifestyle. Close to major centres, with easy access, and yet wonderfully apart, the Island welcomes you.

Market Analysis, August 2017, Salt Spring Island

Market Analysis, August 2017, Salt Spring Island

We are…at the mid-point of our summer season.

An interesting picture of our market, in past several months…up & down, down & up. Lots of pauses en route to steadier outcomes. A definite sales volume increase.

On March 16, 2016, we experienced the beginning of a market recovery, after the almost eight year economic downturn. It was propelled by those people who had sold in Vancouver’s “hot market”.

Between mid-March 2016 and end of June 2016, we saw steady sales, mainly in entry level residential options. At the beginning of the recovery, sellers reduced to meet buyer expectation. Slowly, sales began to favour the seller, and that large spread between list and sale pricings narrowed dramatically.

By the end of July, 2016, along with this subtle beginning of a seller’s market, we began to see a developing interest in higher priced residential opportunities. Waterfront estate properties began to receive offers, in June and July.

Then: the provincial government brought in the 15% offshore tax in metro-Vancouver, in early August 2016, to cool Vancouver’s “hot” real estate market.

The tax did immediately crash Vancouver’s market.

It also stopped the secondary home market recovery…including on Salt Spring. We lost August/September/most of October in 2016. These months are usually very active in real estate sales on Salt Spring.

Then, on December 3rd, “real winter” set in all over the coast…including on Salt Spring. This once every 20 years La Niña weather pattern lasted until May 15, 2017. (Between October 1 and April 30, records going back 122 years, for cool temperatures and significant precipitation, were broken, on the entire Pacific Northwest Coast. For first time in my career, I would say that weather affected winter’s real estate outcomes).

Vancouver tax…plus long and unusual winter…no Spring market in 2017…it added up to almost eight months of “pause”. It appears that July 6/7 began the “season”, for this 2017 year. Short and intense outcomes perhaps?

In spite of the long pauses and haphazard connections, a steady attrition in listings had continued between 2016 and 2017.

The signs of an improving market: low inventory, higher buyer demand, the beginning of sales of undeveloped land.

The result of low supply and high buyer interest can be significant price increases. It may be that we will see such increases by Spring 2018.

At the moment, as we enter our main grid of action (mid-July to mid-October), we are seeing some small bidding wars, for unique properties, plus full-price offers, plus back-up offer situations. Sales of raw land lots/acreages are well underway.

Sellers are now in control of the improving trend, in the transaction moment. Buyers need to make their highest and best offer when considering a purchase. An improving trend means less latitude for a buyer to negotiate. More information? Call me.

Salt Spring in the Summer is a very pleasing experience. The Saturday Market in the Park, the Tuesday Farmers Market, the artistic offerings at ArtCraft in Mahon Hall, the events and gallery displays at ArtSpring, studio tours throughout the Island (pick up the map at the Visitor’s Centre), the Ganges Village galleries, the farm stands with organic produce, the hiking/walking trails to encourage the experience of the natural world, the kayaking and sailing opportunities in this part of the Salish Sea…the vineyard tastings, cidery, craft brewery, cheese-makers…superb restaurants creating great menus with local fare…ocean and lake delights…it’s called summer-summer, and is there to enjoy!