Tag Archives: Gulf Islands

May 2015, Market Analysis

May 2015, Market Analysis

“Been down so long it looks like up to me”…. The real estate song in all secondary home/discretionary markets, during the past 7 years? Perhaps.

Important when shift happens to be treading water in the current of change. No looking in the rear view mirror.

The recovery will become more even-handed

The upward shift may have begun in October last year, but slowly slowly. By February of this year, the uptick consistently strengthened in the entry level residential category.

Salt Spring Island

Salt Spring Island

Two years ago, the majority of sales were below 450,000. This year, sales volume may have doubled over same time period last year…and the price ceiling appears to have reached 800,000. All good news.

As inventory continues to thin out, buyers will have to offer closer to sellers expectations. Undeveloped land will begin to gain interest & buyers will consider building projects. Higher tier priced residential will get offers and begin a sales process that will match current entry level priced rhythms.

In other words, the recovery will become more even-handed in the discretionary regions. This overall improvement should be evident by late Summer/early Fall market.

Salt Spring Island

Salt Spring Island

The busiest March Break/Easter Weekend timeframe since 2007 took place this 2015…now every weekend continues to show activity…the signs of a secondary home market recovery are at last fully evident.

The busyness in Vancouver (a primary residence area) for the past 3 years made it difficult for sellers in discretionary coastal markets to understand the lack of action. This was true on Vancouver Island and on Sunshine Coast, as well as on the Gulf Islands. A “by choice” decision can be put on hold until confidence returns.

Early whispers of improvement were there in some discretionary areas by late Fall, 2014. Now, however, we are seeing general activity everywhere in all coastal markets, and 2015 does appear to be the year of authentic recovery.

A seller’s opportunity? Yes…but pricing has not yet stabilized to match the sales volume increase.

We are just now entering what I always see as our main sales window (mid-May to end of September). These next weeks see the beginning of boating season in this unique protected waters marine region. Many special events and important holiday weekends take place…visitor experiences bring property seekers, too.

So…authentic sales volume improvement, rising price points in those sales if lower priced options, sellers achieving close to list, diminishing inventory…it’s the turn of secondary home markets again.

Sellers who followed the market down will welcome this recovery. Real estate companies will welcome this improvement. Buyers will need to become creative in their offering process, in an effort to do their “best deal”. The old real estate adage of “you make your money when you buy” is true for all market trends…and it’s not always about price.

A buyers market is characterized by lots of inventory & few buyers. A sellers market is best described as low inventory & lots of buyers. Supply & demand always dictate pricings.

 

April 2015, Market Analysis

April 2015, Market Analysis – Salt Spring Island

Salt Spring Back to The Seller Side

Yes, it’s true…the real estate market is turning back to the seller side of the sales equation in the secondary home marketplaces…good news indeed for Salt Spring Island & Gulf Islands & Vancouver Island owners.

On the Pacific Northwest Coast, which includes all Gulf Islands, including Salt Spring Island, plus Vancouver Island, plus Sunshine Coast, the secondary home/recreational/discretionary marketplaces are all definitely on the improve.

li-read-group-all

Inventory has “thinned” dramatically in the entry level priced residential segment. Slow sales in this price category, over the past 2 years, have quietly erased inventory backlog. Affordably priced undeveloped land is now beginning to sell as a result…buying land & building a cottage or choosing a manufactured home allows one to keep the budget at that entry level price point.

As inventory “thins”, prices stabilize. In some cases there are already small bidding wars.

Buyers who are able to increase their budget are starting to look at higher priced residential offerings, for more choice & potentially more motivated sellers.

For The Luxury Buyer In Salt Spring

For those able to consider a purchase in the luxury/upper tier priced property segment, there are still deals to happen, for a buyer. It may take until the Fall Market to see stability in pricings in the over one million category. Right now, this property segment is experiencing the uptick in interest & resulting lower offers that the entry level category experienced during the past two years.

I think when we arrive at late September/mid-October timeframe, we will see an even-handed recovery firmly underway.

I believe we are in the very last stages of a transition period, here, in our coastal region, between buyer & seller markets.

My definition of a buyers market: lots of listings & no buyers. And a sellers market? No inventory & lots of buyers. I think we are moving to that sellers market description.

It has been a long 7 years in all the secondary home/discretionary markets, & globally so. Some areas may even have experienced the “pause” 10 years ago. Within our overall coastal grid, places are never evenly busy.

British Columbia, An Undiscovered Coast

On this still relatively undiscovered Coast, we are always the tail of the dog. Now, however, we are seeing dramatic improvement…sales volume to date, for Salt Spring, has improved by close to 30% over previous year. Price stability has just begun…price increases may be on the horizon, but not just yet. This upward sales volume pattern is in evidence on the entire coastal rim.

Our discretionary area sales window runs from March Break through to Canadian Thanksgiving Weekend (mid-October). It remains a weekend business until mid-May, perhaps. Late June to late September remain the busiest sales months.

A seasonal marketplace once more on the move…plus, a lower Canadian Dollar against the U.S. currency…plus a general safe haven seeking in this turbulent global political & economic time of change…& the ability to live anywhere while working in the digital universe…it all adds to the general rhythm of uptick.

Salt Spring – The Allure of A “Caring Community”

The allure of a caring community is another attraction of the secondary home regions. An aging in place demographic, a strong community service volunteer group, a caring underpinning to the Island…this certainly describes exceptional Salt Spring Island.

Yes, it’s different than the flat conditions of the past 7 + years. However, there is always opportunity. The key? Recognizing it when it appears before you, and then acting on it.

An outcome of the global search is that it throws up a lot of surface information…& a lot of choice usually means slowness in action. The “have I seen it all yet?” syndrome. So important to listen for the “ping”. If a property lights up for you, then that’s the one to act on. It’s about listening to our inner voice.

I sometimes think searching property sites has become an entertainment feature…kind of like a 90s sitcom…look but not act. For an investment uptick, though (always better to buy on a rising market), now is the time for buyer involvement.

Continuing low interest rates are in favour of the buyer, for the time being.

Although inventory is thinning out in the affordable price segment, there are still creative ways to remain on budget.

Salt Spring Island Real Estate – An Appreciating Asset

An investment on a Gulf Island, including on Salt Spring Island, the largest & best serviced of this “southern” grouping, remains a good investment. Over time, a property purchase on Salt Spring Island & the Gulf Islands will build in value.

The Islands Trust put a cap on growth back in 1974…through strict zoning/density bylaws controls. Supply & demand is a factor in a Gulf Islands market, due to the Trust’s non-growth policies.

Enjoyment of a property is also a valid marker of value for a discretionary region. That enjoyment may include the ability to be self-sustaining. The benign micro-climate in our coastal environment makes this possible.

Yes, all markets are like a wave…up, down, up, down…never static. In real estate, it seems that the down never falls as low as the previous down. Thus, over time, a steady increase is consistently shown. On the rise, the fix & flippers start to reappear. Savvy ones are acting now.

Between 2000 & 2001, sales volume rose 50%. Between 2002 & 2005, prices rose 60%. A slowing trend took place between 2006 & 2007. Then the economic collapses of late 2008…now, at the beginning of April, 2015, we seem to be emerging back into 2002 times. Possibly we will look back & decide that 2010/2011 were the true flat bottom years in our discretionary area.

In change lies opportunity.

March 2015, Market Analysis

March 2015, Market Analysis – Salt Spring Island

Yes, it’s true…real estate in the secondary home marketplaces, including on Salt Spring Island, continues to strengthen.

Clicking into Place

Ganges Harbour

Ganges Harbour

Our season for coastal discretionary regions runs from March Break to the Canadian Thanksgiving celebration in October. More outcomes to be reported on as activity goes forward…the season is just now clicking into place.

Prices on Salt Spring have not yet stabilized, to date, but sales volume has increased. It may take until May to see the true pattern of 2015’s market rhythm for the Gulf Islands.

Meantime…forecasters are noting continuing growth in primary residence/city markets, including from the elder population.

Remember that Country Mouse/City Mouse story? It was a “grass is always greener” alert…Country Mouse was convinced City Mouse’s life was much more fun, & City Mouse returned the favour…just so certain that Country Mouse had the best of all lifestyles.

You know the rest: they switched lives and discovered the old truth that we are usually happiest right where we first find ourselves. Well, most of the time.

Early & Later Retirement

This aphoristic tale might need a little updating for our times. With life expectancies extending dramatically, we might need to separate retirement years into two sections: Early and Late(r) Retirement.

My thought about this is real estate oriented, as it’s about the advantages/disadvantages of primary residence (city) and secondary home (rural & small town) lifestyles, as one truly ages.

In the early 1990s, pre-internet impact, there was an entire movement being discussed, called Penturbia. The idea was that people would retire & leave the cities to seek pleasing small towns…thus leaving a primary residence region for a secondary home area.

Small towns had infrastructure (hospitals, health services, cultural options, rural beauties on their boundaries, some had colleges/universities, & many offered amenities to allure one in those retirement years. What was that hobby you always wanted to explore? You get the idea).

Now, in the real post-Internet world of 2015 & on, there is a supposed move back to the city from small town/rural regions. Forecasts say that over 70% of the world’s population will be living in cities, in the very near future.

There is also the thought that elderly seniors will prefer to walk to services/amenities and will prefer to live in the heart of cities. It’s not a suburb experience that’s being sought…it’s a move to a downtown core.

Hmmm….

In this great Pacific Northwest Coast region, what are some of these potentially impacted smaller townships?

On the Vancouver Island side of Georgia Strait, we could look at Duncan (the main hub of the very large Cowichan Valley, which includes Mill Bay, Cowichan Bay, Maple Bay, Yellowpoint, Lake Cowichan), plus at Nanaimo, at Parksville/Qualicum Beach, at Courtenay/Comox, at Campbell River. Let’s not forget Port Alberni & the wild west coast (Uclulet & Tofino).

uclulet

What about the lovely Gulf Islands? Southern islands: Salt Spring, Penders, Mayne, Galiano, Saturna, Thetis. Mid-islands: Denman and Hornby. Northern: Quadra & Cortes. And what about southern Vancouver Island: Sooke, Metchosin, Saanich neighbourhoods?

On the Mainland side of Georgia Strait, we have the Sunshine Coast (includes Powell River, Sechelt, Gibsons), plus Texada Island & the Howe Sound Islands (Bowen, Keats, Gambier).

For all of these regions, a B.C. Ferry is involved in transport from the Lower Mainland, and a second ferry is required for a Gulf Island. Or, a floatplane or land based plane as travel opportunities are also possible to these destinations.

Hmmm….

So, if people enjoy vacation places on the Gulf Islands, on Vancouver Island, & on the Sunshine Coast, and then retire to them for that first time discovery retirement age, & then live on to where they might be in that second retirement phase, what then?

Well, if we’re talking about the over 80s age group, and we are, then what about driving? In some areas, one loses one’s driving licence at age 80…regardless. Diminishing physical health may become an issue. The loss of a partner can breed isolation and loneliness.

Hmmm….

I can see that enjoyment of a recreational property between childhood (with parents) to retirement (say, age 60, to your own retreat property), will add to the quality of your life. After 80, however, what might be best alternatives?

Good transit, easy walking places, all amenities easily at hand, smaller homes with no yard maintenance (spells “condo” to me), plus options specific to aging seniors to keep those grey cells in good order…all might be on a script for positive aging. Are such aging in place elements strongly in place in a secondary home area property choice?

Behold the Second Segment of Aging

Well…there’s the challenge for all those delectable secondary home & recreational & retirement regions. To be able to remain in these scenically pristine regions will only add to the quality of life for all who are lucky enough to live in same. It’s essential, though, to be paying attention to that second segment of aging, & to meet those challenges.

Time to talk to the elected officials, whether municipal or CRD or Islands Trust…plus provincial & federal. Let’s make sure that the energizing & inspirational aspects of life in a secondary home region continue to optimize lifestyles between 80 & 100+.

The biotech revolution predicts that many will live to 100. The small town/rural options maintain a strong sense of personal community. Surely this is the key to successful aging outcomes?

Hmmm….

I think the smaller & more caring approach is key. It needs to be coupled with a physical infrastructure of ease, tailored to those physical dilemmas that capture the elderly. The personal recognition in a smaller community perhaps far outweighs the anonymity of a city environment. So, public officials, are you on this & are ahead of the need?

Salt Spring Island is well positioned in that it seems to attract a thoughtful population, & this aging in place aspect, for age 80 & older, is actively on the agenda of this unique community. Join in the discussions. Salt Spring often models out successful solutions for many community challenges…positive aging in place is no exception.

January 2015, Market Analysis

January 2014, Salt Spring Island Real Estate

Welcome to these early days of the first month of a brand new year.

Ganges Harbour, Salt Spring Island
Named after Janus, the Roman god who looked behind & ahead, at the same time, January straddles what has been & what will be, in real estate outcomes.

Many indicators are out there that are predicting a strong transition from a down to an up market, in the secondary home marketplaces, & globally so.

Salt Spring Island, the Gulf Islands, & Vancouver Island are often the tail of the dog in a market recovery. A recovery is never even-handed. Some places & some property types recover faster than others. The good news: if every story has a beginning & a middle & an end, then here, on the coastal “rim”, we are at the close of the transition “middle ground” between market trends.

The beginning of the recovery might be seen as having become visible by October 2013. It began with sales volume increase in the entry level residential category. Prices did not stabilize.

By October 2014, all property types were finding interested buyers (undeveloped land, higher end residential offerings, thinning inventory in entry level residential options, which helped to solidify prices, & even commercial sales began to occur).

No market ever stays up or down

No market ever stays up or down. Since late 2013, then, our slow coastal region’s recovery, in discretionary areas, had begun.
Ganges Harbour
I often think that secondary home sales mirror the fine art world’s sales pattern…perhaps within six months. The late Fall 2014 art action at the auction houses would seem to point towards an active secondary home sales rhythm to be in place by April/May of 2015.

Perhaps safe haven investing is the biggest motivator to sales in a discretionary/recreational marketplace, right now. If there is a concern about currencies, then a hard asset purchase might be an outcome of such a worry. It’s about preservation of capital. The plus of self-sufficiency might be an alluring factor for choosing Salt Spring & a Gulf Island as the destination. Our lower Canadian dollar against the U.S. dollar is also often an attractor to a buyer, for our area.

Hmmm….

January is a good time to attend investment conferences…listen well. Soak in the prevailing thought. Read investment articles…catch the vibe. Being informed is always the best first step in decision making.

It’s also important to act. The buyers market conditions are dissipating in the secondary home regions. Between now & April, we may see the “deals” evaporating. It has been a long seven year downturn in “by choice” markets. Indecision meant buyer inaction. That is over. Short-term, the upper tier priced residential opportunities may still see some price spreads between list & sale. The entry level market has seen price solidity develop.

If you have long dreamed of owning & enjoying a Salt Spring & Gulf Islands property, now is your moment to buy. The market is shifting upwards…which results in less inventory & higher prices. That’s the description of a sellers market.

December 2014, Market Analysis

Salt Spring Island

Salt Spring Island

December 2014, Market Analysis

Market Shift? Hmmm….

Is this the market moment where we trend into a real estate uptick in the secondary home marketplaces?

What was that great rock song? Sign, sign, everywhere a sign, sign….

Signals of Change

Hmmm…lots of signs that we are slowly gliding towards sellers conditions in discretionary regions, including on Salt Spring Island & on the Gulf Islands.

The slow recovery for our coastal secondary home/discretionary regions began in late 2013. It started with entry level residential options…3 bed/2 bath homes, close to services/amenities, good rental accommodations. Perhaps most buyers in these early days were investor-buyers, not end-users.

As inventory slowly thinned out, prices began to incrementally stabilize, & this busier entry level sales segment continued to strengthen throughout 2014. End-users are now outweighing investor-buyers.

Initially, on Salt Spring, sales were mainly below $450,000…now, the bulk of such family home/residential sales are below $700,000. This rise in buyer willingness to seek properties in that higher price range is a good sign. It shows that buyers are less in charge of outcomes & that the seller voice is strengthening.

As inventory thins, we begin to see undeveloped land sales & building decisions…perhaps one can still come in on budget, & get what one wants, without having to pay to renovate? I’ve always thought that the start of raw land sales points to an upward renewal of a real estate market.

Since late Summer, we have also seen more sales between 1 & 1.8 million. This is a definite signal of an improving real estate market in a by choice area. The higher end discretionary buyers had ignored secondary home/recreational regions during the economic downturns.

Yes, price reductions were significant at the point of those few upper tier priced residential sales, but even that spread between list & sale is now narrowing…another sign of an authentic improving trend.

In late September/early October, there were two higher end sales: both waterfront properties had seen severe price reductions over a several years timeline, & both sold for substantially lower than those reduced list prices. In mid-November, a small bidding war occurred on another waterfront, also listed for a substantial timeframe & also seeing reductions over time…in the end, it sold close to that final list figure, & with more than one interested party. With just a scant few weeks between these sales, is this latter one the marker of change for the higher priced opportunities? Hmmm….

Over 2 Million?

To date, except for a large lakefront equestrian centre, there have not yet been sales over 2 million. There are a number of irreplaceable estate style properties listed between 2.4 & 8.2…all private, many are large acreages, most with exquisite homes, some waterfront & some stellar oceanviews. Salt Spring & the Gulf Islands are slowly returning to their previous position of global awareness, & we may see those international buyers returning to purchase these luxury style gems.

With ease of access to major centres, & yet wonderfully “apart”, & within the best protected boating waters in the world, these stellar Gulf Islands offer a delectable lifestyle and a protected investment opportunity.

Strengthening Prices & Time Differential

So: strengthening prices, less spread between list & sale, soft “bidding wars” for unique parcels, renewed interest in undeveloped land options & willingness to consider building new, plus beginning sales in the upper tier priced residential offerings…a return to sellers market conditions? Well, it’s certainly a strong transition period right now, & with a definite upward direction.

Does the Secondary Home Market Follow Fine Art Sales Patterns?
I look to the fine art market for further guidance. Recently, at a Christie’s auction, paintings sold for hugely more than expected. My anecdotal “thought”: secondary home real estate follows fine art sales patterns within 6 months. Hmmm…. With that script, we should see sellers market conditions in play in discretionary regions by May/June of 2015.

The recovery after the economic meltdowns of late 2008 has been slow in secondary home marketplaces, including on Salt Spring & the Gulf Islands, & it has not been even-handed.

As we enter December, it’s evident that there is a significant improvement underway in tourism & in real estate sales…which augurs well for the entire business climate on the Gulf Islands. Positive change, with an upward track, does now appear to be firmly underway. We may look back, in coming months, & see that 2014 was that important transition period in the discretionary regions. Stay tuned….

November 2014, Market Analysis

Seasonal Adjustments?

Late Fall is usually the beginning of the “softer season” on Salt Spring & the Gulf Islands & on Vancouver Island. Although our Winter weather is more like a long late Fall or a prolonged early Spring, it is still considered our “off season”. This year, the so-called off season remains busy. Hmmm….

Salt Spring Island

Salt Spring Island

Tourism drives real estate sales in secondary home/recreational markets, & then all other businesses experience good outcomes. The engine of those positive results is a stellar visitor experience, & the downturn in tourism between 2009 & 2012 did affect real estate outcomes in all coastal discretionary regions.

Slowly, since late summer of 2013, a slow resurgence in visitor arrivals began. Most businesses on Salt Spring, in summer/early Fall, this 2014 year, did see their “season” as the best since 2007. This local business outcome is a clear signal of an improving trend for real estate sales in all recreational areas.

Entry Level Residential Patterns

The pattern of entry level residential sales, that began in Fall 2013, has continued throughout 2014. Inventory in this property segment is thinning. Sales volume has increased substantially. List prices are slowly stabilizing, in that entry level category. The viewing price point considered by the buyer for same is also rising…from a search between 300,000 & 500,000 to one that would include properties up to 700,000. All good news for a strengthening market.

There has been a small increase, this year, in residential sales between 1 & 1.8 million. Some of these are step-in ready newer homes on large view acreages. A few are older homes on pleasing waterfront parcels, able to be enjoyed as summer places for now, & ready to develop as permanent homes later.

Although many of these options had been listed between 2 & 6 years, & had come down significantly in list prices before selling, their eventual sales do point to a renewal of interest in the higher end opportunities…a sign of an authentic recovery for a secondary home marketplace. Yes, offers are lower than sellers might have hoped for, but the fact of interest is a market dynamic that predicts change…& on an uptick momentum.

Salt Spring Island

Salt Spring Island

Sign of Recovery: Undeveloped Land Sales

Another sign of a recovery: the slow increase in undeveloped land sales. When a buyer will purchase a lot or acreage, in a “by choice” region, to either “hold” or to develop, it shows a growing confidence in the overall economy…& a recognition of where the best deals might be found. Secondary home markets may have seen a 45% drop in value since 2008’s meltdowns. An investor-buyer recognizes this is a premier moment to act in such markets.

In spite of lateness in the year, the property viewings & subsequent sales continue on Salt Spring, on the Gulf Islands, & on Vancouver Island. Yes, the bulk of such sales are still in that entry level residential category, but prices of same are rising.

Our usual Pacific Northwest Coast “season” (May to October) seems to have shifted this year to an August beginning…& it is still continuing.

2014 may be recognized as the true transition year between a severe & prolonged downmarket and a serious hard asset uptick. If so, then our Spring Market (in play by March Break) in 2015 may show higher prices & less inventory.

Recently, tax assessed values were being relied upon by buyers as market value indicators. This may be another area of upcoming change. Previously, in all secondary home regions, market value was always much higher than government tax assessments. This recent timeline in favour of buyers may be slow-dancing to the seller side of the transaction equation. February 2015 should tell the tale.

Change in The Buyer Profile?

One serious change post-downturn (which may have been in place since 2006, in all secondary home/discretionary regions): the buyer profile. Pre-2008 economic meltdowns, that “boomer” demographic was a strong buyer profile on Salt Spring & the Gulf Islands, & on Vancouver Island. An aging population in this segment may lead to a reliance on “millenials”…& their property decisions may be very different from those earlier boomer desires.

Will secondary home marketplaces be as popular? Hmmm…that might be the big unknown, for all discretionary/recreational communities. Changing tastes mean changing visitor outcomes…which directly affect real estate sales in all “by choice” regions. Hmmm, indeed!

Many positive signs, then, as we ease to the final weeks of 2014. Continuing entry level sales activity, growing interest in undeveloped land, a slow renewal of sales in the million plus range, a recognition of excellent values in secondary home markets…plus a renewed safe haven seeking.

All indicators point to better days for tourism & real estate sales in all coastal discretionary areas. The recovery is not even-handed, but it is underway.