Tag Archives: islands trust

Market Analysis, June 2018, Salt Spring Island

June 2018, Salt Spring

So…summer-summer is underway on the great Pacific Northwest Coast, and Salt Spring and the Southern Gulf Islands are a part of this alluring time of year.

June brings vacation seekers, the third annual Tour des Iles event (private boat links between the Southern Gulf Islands) at end of June is always fun, all the studios are open (pick up a map at the Visitor’s Centre), and the hiking/walking trails beckon. Kayaking, cycling, foodie markets (Saturday Market & Tuesday Market), artisans and artists on display, ArtCraft celebrates 20 years with its opening reception at Mahon Hall in mid-June, gallery openings/receptions in Ganges Village, continuing live music venues, farmgate stands..and the fun of Canada Day special events that segue into July.

Enjoy the natural world that has been preserved on all the Gulf Islands…since 1974, when the provincial government body known as the Islands Trust came into being.

It’s true that the property inventory available for sale is very “thin” right now. There are still buying opportunities…it might mean looking at undeveloped land and building your dream. There will always be less for sale on any Gulf Island due to the Trust’s “cap” on growth. A stronger real estate market is also a reason for the low inventory. Lack of product plus strong buyer desire does result in Sellers Market conditions. More info? Call me.

Big Changes Afoot in Real Estate Industry

Very big changes are afoot in the real estate industry as a whole. The first change will be on June 15. At that time, Limited Dual Agency will be deleted from the Real Estate Services Act.

In place since 1995, Limited Dual Agency allowed a real estate agent to act for both seller and buyer, in the same transaction, with the permission of both parties.

Going forward, after June 15, a listing agent cannot also represent a buyer for their own listing. Listing agents will then refer any buyers wanting to view that listing agent’s own listing to another realtor. Teams cannot refer to each other.

There are many more upcoming changes, but the 23,000 plus real estate agents in B.C. need to be retrained via continuing education courses, plus new contractual forms need to be created/printed, and “working with a realtor” information forms changed to reflect the new realities. The first significant change will be the deletion of Limited Dual Agency, on June 15. More info? Call me.

In change lies opportunity, of course.

Change also brings unexpected consequences.

One item I wonder about: many busy realtors do market their listings in print and digital media. In the past, they hoped to encounter a buyer looking for that kind of advertised property. All marketing is a significant expense, and is paid for by the realtor. If a listing realtor cannot deal with a buyer who answers that property ad, will that agent continue to spend dollars on such advertising? Will specialty print magazines and real estate supplements, reliant on listing agents property advertisements, go by the wayside? Hmmm….

Summer is a short season. The natural world flowers forward. Enjoy the calmer moments delivered by these longer days. What did Omar Kayham say? The bird is on the wing? Catch the vibe…it’s summer-summer. Enjoy!

Market Analysis, April 2018, Salt Spring Island

April 2018, Salt Spring

Welcome to my world!

I am lucky to be able to live and to work on Salt Spring Island. I hope you enjoyed this video by a Vancouver based travel writer…who hopes to one day also live on Salt Spring. I thought he caught the essence of this magical place.

April is perhaps the true beginning of our real estate market “season”. Whispers of the year’s tone can appear around March Break, but the main action becomes evident by April.

We entered Spring with a very thin inventory of listings, in both residential and undeveloped land options. A lack of inventory, coupled with renewed buyer desire, does result in price escalation…the economic dynamic of supply and demand.

The “Speculation Tax” in the BC Real Estate Market

There can be interruptions to a market flow…the suggested speculation tax mentioned in the provincial government’s February budget appeared to be about to become such a non-market interruption. However, in late March, the government agreed to exempt the Gulf Islands from this tax. Initially, the capital regional district boundaries had put the speculation (vacancy tax) onto the Southern Gulf Islands, too.

The Islands Trust (the form of governance since 1974, on the Gulf Islands) created a secondary home/recreational/discretionary region.

Lack of affordable housing and work-rental choices are issues everywhere…Salt Spring’s approved affordable housing projects are not able to proceed because of a CRD water moratorium. The CRD needs to address this. More info? Call me.

April is an interesting month…it starts with the cool of March and ends with the largesse of almost-May. Every day is longer, softer temperatures encourage “real Spring” to energize us, and the exterior world welcomes us back.

Inventory

Whether inventory grows again and stabilizes prices or whether inventory remains thin and prices start to rise, Salt Spring and the Southern Gulf Islands remain their serenely beautiful selves…and with some creative thinking, it is always possible to seek ownership. Some ideas? Call me! There is always opportunity.

We live in a time of shift. Salt Spring and the Southern Gulf Islands enjoy proximity to major centres…they are apart but are not isolated.

Artificial Intelligence brings new technological benefits to our lives. The Gulf Islands, including Salt Spring Island, are time tunnels to previous times. Frozen by the 1974 Islands Trust mandate (“to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents), the islands are all about direct experience of the natural world.

Salt Spring welcomes you to enjoy its parks, hiking/walking trails, farmgate organic produce, farmers markets, winery tastings, cheesemaker farm, art galleries, studio tours, live music venues, theatre experiences, marine discoveries…spas, alternative health opportunities, yoga retreats…great restaurants to tempt the palate…feed the body, the mind, the soul on these tranquil Gulf Islands.

Market Analysis, April 2017, Salt Spring Island

Salt Spring Island

Salt Spring Island

April 2017

We experienced the yin and yang of a La Niña weather pattern on the Pacific Northwest Coast…from early December to mid-March.

Salt Spring fell into “real winter” on December 3, 2016 and experienced yet another serious snowfall on March 5, 2017. In between: snow, cold, with ice build-up remaining on roads between the frequent snow storms, only main roads to ferries cleared (side roads and driveways on their own). There was skating on the lakes…that was a fun item. The last time the Coast experienced the La Niña effect was in 1996.

The entire Coast was affected, including Vancouver. The weather did affect real estate viewings…potential buyers couldn’t get out of where they were, never mind not being able to easily get around on Salt Spring!

December, January, February, and first half of March (higher elevation properties only saw the “melt” begin around March 12th) caused a slowdown in new action. Many of the reported sales of early 2017 had their beginnings in late Fall of 2016.

Although we often describe Salt Spring and the Gulf Islands main sales window as falling between March Break and the Canadian Thanksgiving Weekend, the reality is that the busiest months are May, July, August, September.

The Islands are secondary home/discretionary/recreational markets…I call them recipient markets. Sellers have to wait for a buyer to first visit, then decide if a particular island works for them, and then to really start their search for a specific property. Time is always an element of sales in all secondary home/recreational regions.

That said, it’s clear that 2016 was a sales volume increase year…a cleaning out of inventory that had built up during the eight year economic downturn. Prices stabilized, but did not increase.

In a “by choice” area, such as Salt Spring (and the Gulf Islands), there is always a time lag component in sales outcomes.

Salt Spring Island

Salt Spring Island

Often, a tourist with a successful visitor experience becomes a buyer in our region. Usually two, if not three, visits take place before a purchase decision. The non-local buyer wants to “be sure”, before committing to a purchase. When a property sells quickly, it often means that a property is listed exactly when a buyer has returned for that second or third decision-making visit.

With less inventory to choose from, however, we may now start to experience some bidding wars, IF a property is unique.

2017 has had a slow start, solely due to the unusual weather vagaries, but all signs are there for further inventory clean-out (especially in the upper tier priced residential properties and in the undeveloped land segment). After that? No crystal ball, but the signs are definitely in place for price increases in any new (and potentially few) new listings.

The tone of 2017 may be fully in place by late May. It may be that buyers who acted in the first three months of this year will turn out to have been the last buyers able to catch a seller’s interest with a lower than list price offer. In other coastal regions, which often catch the wave of change before it’s seen on Salt Spring and the Gulf Islands, the price escalation due to lack of inventory is in evidence.

Between 2000 and 2002, sales volume increased by around 50%. Between 2003 and 2005, prices rose by around 60%. Our dollar was low against the U.S. currency. International buyers were in evidence. Hmmmm…… Similar soundtrack?

Stay tuned.

To date, there have been 55 sales between January 1 and March 31. The first several (below 200,000) were undeveloped lots. The higher end residential did see price reductions at the point of an offer, but residential below 500,000 often sold at (or close to) list pricings.

  • 6 sales between $160,000 and $199,500.
  • 4 sales between $234,000 and $280,000.
  • 8 sales between $305,000 and $396,000.
  • 8 sales between $400,000 and $485,000.
  • 9 sales between $506,200 and $599,000.
  • 5 sales between $625,000 and $690,000.
  • 3 sales between $729,000 and $769,000.
  • 3 sales between $800,000 and $878,000.
  • 2 sales between $900,000 and $945,250.
  • 4 sales between $1,075,000 and $1,750,000.
  • 3 sales between $2,200,000 and $2,500,000.

I do this market analysis at the beginning of each month…updates may appear in my blog entries.

Along with the transition from a buyer’s market (few buyers and many listings) to a seller’s market (few listings and many buyers), there is the Islands Trust (government body in place since 1974, which capped growth on the Gulf Islands via strict zoning/land use bylaws)…the inventory will always be less on a Gulf Island, thus, beyond market trends).

Salt Spring will be asked on September 9th whether or not to retain the status quo (2 elected trustees and one elected CRD director…the actual decisions, however, are currently made from a central Trust office in Victoria…and these government appointees do not reside on Salt Spring), or whether to incorporate as a Gulf Islands municipality (two trustees elected, per usual, plus councillors & a mayor…the Trust documents remain in place, but decisions re governance would be made on Island & not in Victoria). Keep in the loop of the conversation on both sides of this important issue.

Meantime…the beauty of the Island calls to us. Check out the Food Network’s one hour showcase of Salt Spring…the travelling chefs came last summer and I think they caught the essence of this magical island.

Looking for your special property on Salt Spring Island or on a Gulf Island? Call me. There is always opportunity for a buyer, regardless of market trend in play.

Market Analysis, March 2017, Salt Spring Island

March 2017

So…the season begins….traditionally, March Break to Canadian Thanksgiving Weekend (mid-March to mid-October) offers the traditional grid of real estate sales action in the coastal secondary home (recreational) markets…which includes Salt Spring.

Salt Spring is basically a seasonless market, though, and people visit year round…real estate sales can occur at any time.

If one is seriously for sale, then one needs to “be exposed to the market”. The digital world, which is now where most buyers first encounter a listing, does not recognize weather or time of year. If wanting to sell, it’s important to be found on a buyer search, at any time.

For a buyer, statistics show that they look for property almost 2 years before buying, via Internet sites. Yes, they are “interested”, but not yet “ready”.

About 6 weeks before they are in that “ready” state, they connect with a realtor and make appointments to view what has caught their attention. Once they physically arrive and view, they will see other options, too. Thus, the buyer may or may not purchase the property that first caught their attention.

Hmmm…in secondary home markets, where most buyers are from elsewhere, it often takes two (and sometimes three) visits before a purchase. Since these buyers are often from afar, there can be substantial timelines between visits…sometimes 3 to 4 months, or longer.

Time lags are a part of real estate sales in secondary home/discretionary markets. Days on market are not significant in recreational/by choice regions. Sellers know how long they’ve been listed, but to a buyer who has just started a search, everything is “new”. If a newly listed property sells quickly, it often means that a buyer has turned up for that second or third visit, right at the time the listing came onstream.

So many changes to the real estate industry, all of them driven by technological shifts, but some things remain the same…especially in the recreational/discretionary regions.

Customer service, knowledge of the area (both inventory and market trends), negotiating skills, an authentic interest in a consumer’s concerns, knowledge of zoning/bylaw issues (very important on a Gulf Island, which is governed by the Islands Trust), a good short-list of qualified professionals to aid the consumer (property inspectors, legal advisors, septic installers, water test labs, architects, contractors, mortgage advisors, etc)…a local realtor understands the area and can interpret the many local issues.

An Internet search is helpful, but some items in a recreational region are best discussed with a knowledgable & experienced local realtor. That interpreter function is an essential addition to any internet based information.

Market trends: like any market, real estate also experiences that wave-like model…up and down and somewhere in between. Markets are never static.

The global downturn of late 2008 lasted for almost 8 years in our local region…some areas saw recovery much earlier. For Salt Spring and the Southern Gulf Islands, the recovery began in mid-March, 2016. There were earlier whispers of action in late 2015, but a marked upsurge in residential sales volume began in early Spring, 2016. By year’s end, inventory had thinned out and prices had stabilized.

A seller’s market is characterized as low inventory coupled with high buyer demand. This scenario can lead to price escalation.

This early in the season, it’s too soon to speculate on price points. All that can be said is that there might only be two or three property options currently on the market that will suit a buyer. Thus, the seller may benefit by achieving list price or close to it. If this lack of inventory trend continues, then price escalation may be a factor by the Fall Market.

There is always opportunity for a buyer, regardless of market trend in play. Creative ways to buy that special property, in a recreational area, can always be found…even in a seller’s market.

Market Analysis, August 2016, Salt Spring Island

Summer on the great Pacific Northwest Coast is a superb season…and the micro-climate enjoyed by Salt Spring Island and the Southern Gulf Islands is delectable.

Salt Spring Island

Salt Spring Island

It’s a short season…and here we are at a mid-point. Time to get out there and enjoy all of the amazing opportunities offered in our special Islands region.

A time for Inspiration

Lakefront swimming, ocean kayaking, sailing between alluring anchorages, savouring produce from farm gate stands, being inspired by artists and crafts artisans in galleries and on studio tours, enjoying live music venues, theatre productions, and a hiking/walking experience that re-introduces one to the natural world preserved on the Gulf Islands.

The real estate market has recovered on the Gulf Islands in what I call the residential entry-level property segment. On Salt Spring, that would be 350,000 to 750,000 price range.

It does appear that the Spring market in the Gulf Islands is about sales in that entry level residential category.

Between mid-July and end of November, upper tier priced residential properties begin to find their buyers.

Some years back (and who knows why), the Gulf Islands became a late summer/fall real estate marketplace.

This market analysis is always written at the beginning of a month. For market updates, reflecting the rest of the month’s outcomes, check out my blog. Also check back to my June and July “reports”…this is a very new recovery (just 10 weeks old? After an 8 year downturn.).

So, the first half of the year saw the following breakdown of sales (January first to July 18th):

  • 19 sales up to 200,000.
  • 26 sales between 200 and 300,000
  • 40 sales between 300 and 400,000
  • 43 sales between 400 and 500,000
  • 37 sales between 500 and 600,000
  • 24 sales between 600 and 700,000
  • 9 sales between 700 and 800,000
  • 5 sales between 800 and 900,000
  • 5 sales between 900 and one million
  • 12 sales between 1 and 2 million. (most below 1.7)
  • 1 sale between 2 and 3 million
  • 1 sale between 3 and 4 million

You can see, then, that the Spring market is about the beginning stirrings of the authentic recovery. From mid-July to end of November it’s the upper tier time.

An outcome of thinning inventory is price increase…for the moment, a buyer may have to meet the benchmark set by the seller, as listings diminish. Sales volume may have tripled, and prices may have stabilized…but price increases have not yet been strongly evident. As we ease into the Fall market, we may start to see prices escalate.

Why Should you Purchase on Salt Spring>

Why consider a purchase on Salt Spring Island or a Gulf Island? One thought: the Islands Trust (created in 1974) effectively capped growth on the Gulf Islands. A limited inventory, combined with a strong buyer demand, creates a higher price point for all purchases. It’s the economic axiom that low supply plus high demand equals price escalation. A property purchase on a Gulf Island is perhaps a protected investment.

Perhaps a more important reason for a Salt Spring Island or Gulf Islands purchase: to enjoy a softer, gentler lifestyle, with an emphasis on the natural world and the impact of an artists voice.

Salt Spring and the Southern Gulf Islands are an easy commute to Vancouver, to Victoria, and to Seattle. Whether by ferry (3 different regular scheduled ferries service Salt Spring) or by floatplane (regular sked flights to downtown Vancouver, to Vancouver Airport, from Salt Spring), it’s very easy to come and to go…and yet these Island gems swim enticingly apart in the Salish Sea.

Proximity to major centres, yet serenely apart. All opportunities in the 21st Century available, yet an alluring yesteryear ambiance. A thoughtful and caring community, yet strong opinions. Definitely an interesting place to reside!

October 2014, Market Analysis

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October really is the segue from mellow Fall to stark Winter.

Early October pretends it’s still September…late October says, no-no…leaves flying, November’s almost here…it’s the Pacific Northwest Coast season of grey. (I think that means our form of Winter).

This thin strip of coastal beauty does offer a northern California “off season” weather pattern…& even more so on the amazing Southern Gulf Islands.

Salt Spring enjoys a “cool Mediterranean” climate, one that encourages orchards, berry production, vineyards, olive groves…& yet…Winter is Winter in any latitude that offers four seasons.

What about real estate sales in this soft “off season”?

What about real estate sales in this soft “off season”? The odd thing is that it can be busier in late-Summer-into-Fall than in the Spring/Summer season.

This change in physical arrivals on island, to view & to make decisions about buying, shifted into a last half of the year sales moment some substantial time ago.

It’s important to be consistently listed year round, if selling, so that a buyer can discover the property & then make plans to visit, & to view. The Internet search eye never sleeps & it’s important to be displayed to it, no matter the time it takes for a buyer response. The buyer profile for Salt Spring & the Gulf Islands is not “local”. Time is a component of the discovery-&-then-action cycle.

Very probable, though, that the arrival time to view will be in late Summer/Fall. Odd, when Spring can be such a beautiful time on this great Pacific Northwest Coast, but it is what it is.

So. The sales pattern to date: a repeat of late 2013. The bulk of sales remain in entry level residential, 3 bed/2 bath family homes, close to Ganges…good rental opportunities. This seems to point to a continuing investor-buyer purchaser, & not necessarily an end-user.

At the same time, undeveloped land sales, commercial/business interests, & upper tier priced residential opportunities remain flat segments. Random one-off sales infrequently take place, in these less active categories, but no clear pattern is yet in evidence. Also, in these random sales, a large reduction still takes place at the point of any offer, even when there have been previous reductions to that point.

Where are the best deals?

It may be, from a buyer perspective, that the best deals will now occur in the higher priced residential options or in the undeveloped land choices, in a secondary home marketplace.

Very slowly, there are whispers of interest in commercial opportunities, & from offshore investors. It may be that the strict zoning controls of the Islands Trust (in place since 1974) have an attraction…unique zonings, that can’t be repeated, have a value.

As inventory clears out, in that entry level residential category, it implies price strengthening. This may be the authentic transition moment between the end of a downturn & the beginning of an uptick. Rumours of mortgage rate increases, from recent historic lows, may also be a signal of an uptick momentum in a market.

The rhythm of the uptick is not a racing forward pattern…yet. It’s still a slow chug-chug momentum, but it’s steadily going forth. This consistency, even though most sales still remain in that entry-level category, is a very positive sign.

Not everything is market related… Other considerations…

It’s important to remember to appreciate the illuminating and naturally beautiful Islands we inhabit. Slightly “apart”, and yet close to major centres…with all services/amenities close at hand…with an interesting & caring community…with the thoughtfulness that an artists community encourages…with a self-sustaining lifestyle to preserve and protect…certainly, Salt Spring Island & the Gulf Islands are alluring locations to enjoy as a visitor or to call “home”, no matter the market trend in play.

Markets are a wave pattern. The downturn may have started in secondary home markets as early as 2006, though not have been totally evident till late 2008. The uptrend may be underway, now. Waves are not static, & markets are always in a flow of shift.

There are beginnings/middles/ends to all market cycles. Recovery also has a beginning, but it’s rarely even-handed. The Pacific Northwest Coast always seems to be the “tail of the dog”…last to see change. The secondary home/discretionary/recreational regions have been slow to recover, all over the Coast. Patience on the part of sellers is still an essential.

Buoyancy in that entry level residential segment, in these “by choice” regions, is a very good sign, & is the traditional start of an authentic market recovery. We may see more sales in the upper tier residential segment between now and early January.