Tag Archives: gulf island

March 2012, Salt Spring Island Market Analyses

It seems, in our secondary home/discretionary area, that January & February are often a continuation of the rhythm of November & December, of the previous year.

March, then, usually begins the pattern of the current year, and the number of March Break arrivals to view property, and possibly to make offers, forecasts the summer season…busy at March-Break-into-Easter usually means brisk sales time from mid-May to mid-September (our traditional “season”).

We may be in year seven of a seven to ten year cycle, which means a slow upticking in sales volume may already have begun. To date, there have been fourteen firm sales, since beginning of January. Ten have been under 620,000…most below 500,000.

This steady sales pattern mainly in the entry level residential category has been a feature of the Salt Spring sales picture for about two years…this busier first two months is perhaps a sign of consistency to the marketplace…a good feature, indeed.

Sales in undeveloped land options have not yet improved. In a downmarket, buyers are not seeking a holding property nor do they want a building project. The slow roll-back of the HST tax may help in the new home category
, particularly in city or large town environments, with developments & spec housing…in discretionary/secondary home areas, where building projects are custom & personal options, the HST repeal may or may not create activity.

The upper tier priced luxury residential segment also remains quiet. In some few cases on Salt Spring & the Gulf Islands, extraordinarily motivated sellers have accepted very low prices, well below intrinsic or replacement values & also below tax assessments. Personal need is not noted by appraisers; they look at the sale price, only. These lower prices will affect stats.

In many cases, in the luxury segment, local realtors have encouraged very broad price reductions, in an effort to jump start action from a buyer. These reductions do not appear to create buyer interest. In a secondary home marketplace, a purchase is about choice…and that choosing can be deferred until the buyer sees a definite sign of a hard asset recovery. Buying is an action propelled by confidence.

Price reductions do affect all sellers, however, as it is essential to be seen to be competitive in pricing, when a buyer might be looking at equivalent properties, also for sale.

Thinning inventories may lead to price stability and then to slowly increasing prices.

Nothing ever stays down (or up)…that equilibrium moment, when the teeter-totter of a market cycle appears to be evenly balanced, is of very short duration.

Low mortgage rates are not the motivator to action that one might think. It is buyer confidence that creates a market response. Sellers and realtors do not create a market…buyers do.

In a city market, there are usually more entry level options available, overall, and correspondingly fewer luxury choices. In a secondary home/discretionary and resort-based area, the opposite is true. Such areas attract buyers lucky enough to own more than one property, or purchasers who, because of the Internet, can choose to live anywhere in the world and thus could work from a Gulf Island, or perhaps the buyer is someone who has done well elsewhere & can now choose a Gulf Island to retreat/”retire” to…it’s a specialized buyer profile who is in a position to create their personal dream.

A purchase in an area like Salt Spring Island and the Gulf Islands is about choice…and choice in timing is also a part of this. The buyer sets the pace in a discretionary marketplace.

The Gulf Islands are not municipalities…they are governed by the government body known as the Islands Trust. The Trust has been in place since 1974, & development on all the Islands is firmly controlled by strict zoning/density bylaws.

Bowen Island voted to become a Gulf Islands Municipality some years ago…the Trust & its bylaws remain in place, however. Salt Spring might consider this outcome, too.

There is an impression that the international market is moving out of cash right now and back into hard assets/commodities, including real estate. The continuing unraveling of the global economic picture has an impact on every region. We are in the post-Internet world, vitally interconnected, and the Global Village is with us. In difficult times, hard asset investment is understood as a way to protect capital.

An interesting sidebar to the post-Internet world is that it has not only erased time & geography, but has also made “someplace” in competition with “everyplace”. It’s a big world, after all! Choice, again….

Salt Spring Island and the Gulf Islands enjoy scenic beauty and environmental protection. They enjoy all of the amenities necessary to partake of life in the “real” 21st Century, and yet experience the allure of “yesteryear”. They have easy access to major centres, yet offer a village lifestyle. A temperate climate creates opportunity to be self-sustaining…the 10K diet is alive & well, here. A strong arts community, a dynamic cultural life, an oceanfront pleasure…these islands are in the heart of the best protected boating waters in the world. One is gifted to be able to live in this still very undiscovered area.

September 2011 | Salt Spring Island Market Analysis

September, 2011.

Salt Spring Real Estate Market Update

As we are daily reminded: the only constant in life is change.

It’s also true that in change lies opportunity.

Our post-Internet time has obliterated time and so there is both no time, as in time famine, and also always time, as in never off.

With the search engine never asleep, and anything you want to know just a keystroke away, the power of the search now resides with the searcher…that means the consumer, in a sales situation.

Switzerland

Switzerland via NASA (and flickr.com)

This has huge impact on all real estate in secondary home/discretionary areas, where the Internet has erased both time and geography, and where someplace is now in competition with everyplace…it becomes essential to market the area itself as well as the property located there.

someplace is now in competition with everyplace…

This encourages time lags in decision-making…the buyer has to first discover the area, then visit, then think about what it means to his/her lifestyle, compare it to other options, and then has to focus in on the actual properties of potential interest in the chosen area.

Time is a factor..,perhaps a purchase will take from one to five years in a discretionary area. If it seems to happen more quickly, it may simply mean that the buyer has already been through the above process, may be back for a third “look”, with months between visits, when suddenly a desired property comes on the market, at same time. That can happen!

Patience plus international marketing is the key for secondary home/discretionary/resort based regions..,and globally so.

We are now residing in Marshall McLuhan’s “global village”…a local buyer for a Gulf Island property might come out of Vancouver or Calgary or San Francisco or Toronto or Shanghai or Sidney or Auckland or London or Bern or..,you get the drift! “Local” doesn’t mean in your own backyard, anymore.

Throw in up or down market trends, currency valuations, deflation/inflation arguments…and there’s more “time lag” components!

Over time, an investment in a secondary home/discretionary area will appreciate…it’s a “long tail” investment, though, never a fix & flip.

As soon as a consumer is in charge of a process, time is a companion in a sales situation.

More info? Call me! And your thoughts are? Always welcome!

How may I help you buy your special Salt Spring Island or Southern Gulf Islands opportunity?

Call me!

Beachfront & Tuscan charm on Salt Spring Island

beachfront

beachfront

Waterfront living on Salt Spring Island.

Walk-on beach with sheltered cove, boat-launching ramp, beachside float-plane / boat-house with power and water, and swimming float. The property features a panoramic viewscape, stunning sunsets, privacy, access to shell-fishing, trails, ponds & creek. Notably, it is fully fenced, with a cosy courtyard, heated swimming pool, 1200 sq. ft. workshop, and separate studio. Zoning allows for a cottage. Well sited along a stately driveway, the custom-built, 4 bed home (1991 addition designed by H. Schubart) features a level entry, lavish master bedroom suite on main floor and lower-level guest accommodation… for $2,200,000

Fields of Gold?

tuscan

… and then there is… this Tuscan Oceanfront which is simply
One of the very best oceanfront parcels, and it could be yours! In the prestigious and beautiful Fruitvale area, this parcel enjoys excellent sun exposure (s/sw/w), plus expansive sand & crushed shell beach, plus has a foreshore licence & geothermal capability (build your own dock, here!).

Excellent water supply. Arable land (once part of an historic farm), enjoy the heirloom orchard, the bountiful veggie garden, the easy care landscaping….the home offers an homage to Tuscan charm, and is sited close to the beach.

Penturbia and the Pacific Northwest Coast

Brief Salt Spring Island journey

When I first arrived on the Island…

These weren’t “new” projects, though, but simply the building out of things always on the books, so to speak, after the Islands Trust came into being in the mid 1970s.

From 1990 to 1997, then, the Island experienced changes in the “seaside village“, with older buildings being removed and new buildings constructed. Some of the multi-family (i.e. townhome) zoned properties began to be built out, too, in this same time period.

If one had visited the Island in 1985, and then had returned in 1995, it would have been a quite different village core that one would have returned to.

All of the changes, though, had been put in place, as “potentials,” when the Islands Trust was created by the then Provincial Government, in the mid-70s, and were not “new” options. The changes conformed to the Official Community Plan, (where one can read the bylaws and the development permit area regulations, which are the Gulf Islands form of “government”).

From about 1995 to 2001, the Island “rested” in a fairly stable moment; part of this was due to a recession in the Province of B .C., generally, and part of it was the usual resting that takes place after a spurt of building & development occurs.

In early 2001, B.C began to pull out of its recession, and the Gulf Islands and Salt Spring Island were no exception.

Post 9/11, however, it seemed that a general rewriting of one’s life script occurred, world-wide. A movement known as “penturbia“, which was talked about in the 1980s, seemed to have a resurgence of interest. People began to seek out smaller communities.

Marketing of Real Estate in 2010

The arrival of the Internet, and its ease in allowing one to “do business” anywhere in the world, was also a factor in this ability to live somewhere and work, in virtual space, elsewhere.

The beginning of retirement for that broad generational grid known as the “boomer generation” might also have been a factor in the allure of smaller & more recreationally oriented areas.

Several things began to converge, then, and Salt Spring Island’s year round & stand alone community lifestyle began to be noted.

The pleasing microclimate, here, was also a factor (known as cool Mediterranean).

The Islands Trust’s “preserve & protect” mandate, which capped densities on all of the Gulf Islands, including on Salt Spring Island, inadvertently created a higher priced marketplace.

It may not have been their intention to do this. To preserve the park like atmosphere of the Gulf Islands, for the benefit of all of B.C. may have been their reason for coming into being,

but the outcome of these rules prohibiting growth means that the old maxim of “supply and demand” has come into being, too.

The Gulf Islands, including Salt Spring Island, have seen substantial price increases, in recent years, due to the stringent controls on density, put in place by the Islands Trust, in the mid- 70s.

The allure of the Pacific Northwest Coast, and the extra charm of the Gulf Islands, means that we’ve been “discovered”, as an area, in some fashion, & discovered by a “global audience”.

There’s a limited amount of land available for development, on any Gulf Island, because of the Islands Trust’s mandate.

It seems, as one encounters Salt Spring and the Southern Gulf Islands, that they are very close to what I term the “wall of no more”. As one drives around the Island, today, one is seeing it as it will always be — some new areas may be opened up, but they won’t be visible from the main roads, and the Island is pretty well its “essential self”, now.

Price escalation, in the end, will be inevitable because of the cap on density.

Markets are cyclical in nature, of course, and there will be ups and downs in the “hard asset” marketplace of real estate. If one is lucky enough to be a homeowner on this special and beautiful Island, though, it is a gift for the future to one’s family. It is an investment of a different kind.

The Salt Spring real estate market, though, over the years that I’ve been on the Island, seems to have evolved into a secondary home marketplace.

At the moment, most purchases are second or third home alternatives. Busy people, with main lives “elsewhere”, can’t just immediately “arrive” and stay.

They may end up calling this their principal residence, but it doesn’t often start that way. There may be landed immigrant issues, too — to be here year round requires further conversations, perhaps with an immigration lawyer. It is a mainly out of province purchaser profile, and they cannot always “be here”, full time, to begin with.

All of these shifts create change

Thales once commented, in Ancient Greece, that

one never dips one’s toe in the same river water, twice.

Change is the only constant, other philosophers state. In change is opportunity, perhaps.

Whether Islanders care for this concept or not, change has occurred, steadily, over the past several years. Salt Spring is not a backwater, although it does owe the Trust a debt of thanks for having retained its essential “rural charm,” in these past years.

Realtors are able to be “interpreters” of change, as they are often, just like mortgage brokers and appraisers, in the “front line” of shifting markets. They aren’t the creators of change, though.

With the pressure “on” to allow more development, on the Island, as a result of the desire of some property holders to subdivide, and the desire of the Trust to fulfill its mandate of “to preserve & protect“, and, at the same time, reflecting the growth in population in this unincorporated area, the Island does face some interesting challenges, at this moment in time.

Affordable housing, an aging population, a wish to attract a seasonal recreational visitor and to create a viable business core in the commercial sector, etc. etc. — these are concerns and suggestions of and from Islanders.