Tag Archives: islands trust

July 2013, Market Analysis

Secondary Home Market’s Afoot?

I found it very interesting to read a June release forecast, on the summer season sales projection, for secondary home markets…from a major real estate franchise in Canada.

A client phoned me up & read it to me…sounded just like one of my much earlier monthly market analyses or some of my various daily blog reports! Check out some of my past thoughts.

I have been projecting, since last August, that it would take until July this year to see a resurgence of interest in secondary home/discretionary regions. I think I am being proved right, & I am not a clairvoyant.

These “by choice” resort-based areas have been “flat”, globally, since mid-2007. Now, movement is afoot! No one can force a market…it has a natural cyclic rhythm. Now, it is with us.

No one “has to” purchase a second home

No one “has to” purchase a second home or retire in any particular timeframe or choose a recreational parcel…such purchasing decisions can be put on hold.

Consumer confidence is the key to secondary home market activity.

Can also be a market movement propelled by fear, though…in this case, might be a concern about currency validity and the preservation of capital…& perhaps even a desire for a safe haven, to be self-sufficient.

For whatever reason this action has started, this report notes that prices have been substantially reduced between 2009 & current date, in secondary home marketplaces, and so the properties selling are perceived to be hugely undervalued. Foreign buyers are apparently a large proportion of the purchasers.

A return to hard asset investments (& real estate, though not liquid, is a big item here) is clearly on the radar.

The Islands Trust

Salt Spring Island & the Gulf Islands are under the jurisdiction of the provincial government’s Islands Trust. This Trust has been in place since 1974, & it severely controls growth through strict land use/density bylaws. Call me, for more information on this.

When one has a growth-controlled model in place, a government mandated body with a “preserve & protect” guideline, and in an area of beauty, soft climate, great protected boating waters, close to major centres and yet beautifully “apart”, one also has the potential to become a global destination for those seeking amenities plus a safe haven lifestyle. What did economics 101 teach? Supply & demand? Hmmm….

I think we will see a strong clearing out of inventory over our season (which has shrunk to July/August/September/October now), with prices remaining volatile. As inventory clears out, though, stability in pricing will follow…will we see substantial price increases by early 2014? Perhaps….

It’s important to me that you enjoy a successful real estate experience on Salt Spring Island, on a Gulf Island, and on Vancouver Island…for all your real estate needs, please call me…discover the difference!

June 2013, Market Analysis

June 2013, Market Analysis

Here we are in June…the half way point in this oddly (to date) haphazard sales year.

In 2012, the majority of sales were in the entry level residential category, and sales took place right from early January. That was unusual, as normally March Break begins a sales pattern. A very few upper tier priced residential options did sell in 2012, but at markedly lower prices than sellers might have hoped for, and these were mainly waterfront choices.

Entry Level Residential Sales Remain Unchanged

To date, in 2013, this pattern of entry level residential sales remains unchanged, although sales did not begin to broadly appear until closer to March…a more typical action.

Galiano 2 Homes & 2 Docks

Galiano 2 Homes & 2 Docks

The bulk of sales remain in that beginning priced residential segment and, again, a very few upper tier priced residential offerings, still mainly waterfront choices, have found buyers.

Many of these waterfront sales, in both 2012 & this year to date, had been on the market for 2 to 7 years, had seen substantial reductions over time, & then received a further reduction at the offer point. In other words, the buyer was in charge of the process.

Price reductions of a substantial nature continue to come in, on a consistent basis, from some realty companies. This may have more to do with the need of that realty company to generate income to balance the very expensive outgoing costs of being in the real estate business.

Local Market Manipulation

Local market manipulation is a real thing, however, and all sellers have to respond to this in an effort to remain competitive in pricings…a series of reductions from one company will then, in the end, impact listings prices from all companies.

A very few undeveloped land options have sold this year, and that is a heartening sign. I always think that sales of raw land are a true indicator of an authentic real estate recovery in our kind of secondary home/discretionary marketplace. In a downmarket, the few buyers around are attracted by rental or income producing options…thus, raw land can be overlooked.

Our Gulf Islands sales window has shrunk to May to October. People may make offers at any time…chances are, though, that they viewed during this narrow timeline of physicality.

It may take until August to understand this year’s market pattern, as there are not enough sales yet to point to a trend. All we can say is that sales volume continues as in 2012, and that there are a lot of choices in residential offerings over 600,000.

Property Inquiries on the Rise

Inquiries do appear to be on the increase, and that’s a good sign! Physicality will follow. Some new listings, in the waterfront segment, are coming onstream at 2007 price points. That is also interesting….

The Gulf Islands form of governance is the Islands Trust. Created in 1974, with a mandate of “to preserve & protect” the environmental beauties of these islands, for the benefit of all B.C. residents, this Trust thus controls growth via severe zoning/bylaw restrictions.

So…sounds like limited inventory, over time, to me.

What’s Next?

As we climb out of the downturn that has gripped all secondary home markets since mid-2007, we will start to encounter a lack of inventory, based on this non-growth Trust stance…just as buyers are once again seeking places to preserve their capital.

Sounds like sellers market conditions are reappearing, in other areas. Multiple offers are being reported in busy primary residence regions. Hmmm….

Important to be paying attention to the shift moment, whether as a seller or a buyer, at this mid-way point between market trends.

Yes, very essential to know the past sales, but also important to recognize the uptick. Pricing by a seller & offered price by a buyer, at such a mixed time, are both needing extra thought.

So, the Gulf Islands (including Salt Spring) have bylaws that control/restrict growth. Plus the real estate market in secondary home/discretionary regions may be entering a recovery…in year 8 of an 8 to 10 year cycle? Buyers have again decided to act. The driver to buyer action may be a safe haven seeking…a hard asset purchase to preserve capital.

Prices have not yet stabilized, but this is just the beginning of our “season”…May to October…will prices be showing firming, by September? Hmmm….

The supply & demand rule is the marker of change.

Important to be paying attention to the “now”, and not to the flatness of the past 5 to 6 years. No rear view mirror reflections, then. We need to be looking ahead.

In change lies opportunity.

When should I be purged from the database?

20130422-121720.jpg

Change, change, change….

I think it’s the mantra of our time.

Spoke earlier to a woman trying to sell advertising space in an English based magazine…the target market was a live/work somewhere else in the world scenario.

She called me because my name was on a database from 2010…I had advertised in a magazine targeted to people wishing to immigrate to Canada. That magazine folded after 11 issues, she told me…because advertising revenue had evaporated by 2011.

Ah, yes…publishing as it used to be done…another casualty of the big eraser we call the Internet.

Nothing has remained untouched. No business model has been left without serious change or even collapse.

My more focused eye is targeting my specific area…Salt Spring Island, the Gulf Islands, & Vancouver Island. Secondary home marketplaces, all. Recreational, retirement…and on the Gulf Islands the added aspect of being under the Islands Trust jurisdiction. No one “has to” buy in a discretionary area. How to connect with the interested and qualified buyer, when no one is local? That is the question!

Nothing wrong with change. It does bring opportunity. It can also create chaos, though, as one lifestyle slides through the sandpiper mitt into the next style.

Hmmm. Some things to do: increase your veggies & greens intake. Walk 30 minutes a day. Get up & walk around…don’t sit non-stop at the computer. Read something that has nothing to do with your job. Learn another language (better than crossword or sudoko puzzles, to keep your grey cells perking along). Breathe…listen to music that energizes you…dance! Important to keep oneself in good order so can tread water in the sea of change…en route to the dry land of the new.

And your thoughts about how to keep your ship on an even keel, on the ocean of change? Always welcome!

February 2013, Market Analysis, Salt Spring

Did you know?

Salt Spring Island has a hospital, plus extensive seniors oriented opportunities. A superb retirement lifestyle is available.

It has 3 elementary, one middle, & a state of the art senior secondary school. There is a private school on island, too. A great family oriented lifestyle can be found here.

Salt Spring also offers a theatre (ArtSpring), an indoor pool, and a brand new library resource centre in the heart of Ganges Village.

Two marinas, a Sailing Club with private dockage, plus 8 lakes (4 of them open to the public for swimming, sailing…no power motors allowed on the lakes).

Lovely beaches, easy access for beachcombing, swimming, kayaking, sailing…and always that alluring environmental beauty, preserved by the Islands Trust (the form of governance on the Gulf Islands).

Parks, hiking/walking opportunities (clubs to get involved with, if desired), plus a vibrant arts based economy (galleries, studio tours, artisan markets & craft fairs).

The 10K diet is alive and well…farmers markets, farmgate stalls where you pick up free range eggs and garden produce & leave the money for same (the honour system works here). Vineyards that produce award-winning wines…the islands are similar to conditions in the Loire Valley, in France.

3 ferries (from Vancouver Island, Victoria, & mid-Vancouver Island), plus 3 floatplane companies (regular skeds out of Vancouver downtown & airport, from Vancouver Island’s Maple Bay, & from Victoria’s airport) with year round service, and with seasonal service from Kenmore Air out of Seattle…very easy to come & go from Salt Spring!

Nothing is absolutely perfect, ever, but Salt Spring Island and the Canadian Gulf Islands come close!

The micro-climate is only one part of the charm of these special islands. Growth is curtailed by the stringent zoning/bylaws of the Islands Trust, in place since 1974. This lower rate of development, & subsequent smaller inventory of properties, can keep prices somewhat higher than an equivalent property on Vancouver Island, for example, where growth occurs more readily.

More info and details on how you can be a part of the Island lifestyle? Call me!

The Market

The real estate market is always a cyclical rhythm…between 2002 and 2005, sales volume on Salt Spring apparently rose by 50% and pricing by around 60%.

The economic slowdown showed up in secondary home/discretionary marketplaces, including on the Gulf Islands, by mid-2007.

The global economic meltdowns of late 2008 left no one exempt.

Between 2009 and 2011, sales in discretionary markets were very slow and conditions remained flat on Salt Spring and the Gulf Islands.

The first half of 2012 in secondary home markets saw sales rise in entry level residential options…volume in this specific segment saw a rise of around 30% on Salt Spring, but prices remained highly volatile/unstable…price reductions of a very substantial nature took place throughout a listing period, in all property types, and another reduction usually occurred at the point of any offer, regardless.

In the last weeks of 2012, some upper tier priced residential offerings on Salt Spring found buyers…with the same substantial price reduction dance en route and a further reduction at the point of the offer.

Prices may have suppressed on Salt Spring and the Gulf Islands by around 35%, between late 2008 and mid-2012, according to some appraisers. In many properties, this drop in market value is mirrored by a reduction in 2013 government property tax assessments (the government looks at sales from the previous year).

Sales of undeveloped land and commercial/business options and cottage/recreational offerings all still remain very flat in secondary home regions. That reluctant buyer profile has not yet decided to invest in raw land opportunities, perhaps.

Projections are calling for a stronger real estate market in 2013, with all property types and price ranges forecast to see an uptick in activity. For Salt Spring and the Gulf Islands, it may take until the summer/fall market to see strength in sales volume. As inventory thins, prices will stabilize. Will the first part of 2013 thus signal the end of buyers market conditions? Possibly….

January 2012, Salt Spring Island Market Analyses

January 2012, Salt Spring Island Market Analyses

Happy New Year!

I think many people will be glad to see the back of 2011…we may look back a few years from now and decide that 2011 was the key year in the societal shift that has been underway since 2000. Key in the sense that change erupted in all spheres & all at once…political, economic, societal, and personal…you name it, it will have changed, shifted, evolved, erased…and what about the newly created? 2011 seemed to be the year all elements conspired.

The economic downturn of October, 2008, global in its impact, broadened from the housing bubble to the banks and to Wall Street. Now it has further expanded to the geopolitical level. Nothing is exempt…the Arab Spring, the Eurozone meltdowns, the economy continuing to wallow in the doldrums, the power of the consumer of services restlessly angry…think about the now global Occupy Movement & the new Russian dissatisfaction with potentially rigged elections…plus wars & rumours of wars & unrest in Syria, Iran, Afghanistan, Pakistan, DR Congo…shift everywhere!

In change lies opportunity…well, yes, but the speed of change is the unknown. The internet’s binary rhythm (on/off, act/react) can occur in an eyelid’s blink. In the past, change was a much slower animal…in some cases, it was possible to think through a shift and to reposition.

Today, our technology has erased time, and instant responses are demanded. Flexibility has become an essential. Twitter’s immediacy gets data out there asap, and the reaction to it is just as immediate.

What about our editing function? Important to turn all that undifferentiated data into worthwhile information…what’s important/what not?

I like to save my projections till later in the month…so many trajectories underway: the uncertain outcome of the bid to save the euro world, the worry about the U.S. ability to restructure & move forward, the concern over outcomes in North Korea, the potential for unrest in China, the continuing dilemmas of terrorism & sectarian violence in Africa & in the Islamic world, and the potential for unrest in Russia. Important, I think, to digest the effects of the last quarter of 2011, and to see what the winds of change are blowing our way in the first quarter of 2012. Perhaps the real beginning to a new year is in early March?

Hmmm…the Chinese lunar new year is earlier this year, arriving at the close of this month, and heralding the Year of the Dragon. Sounding fiery?

Important at such moments of flux to remember what is important…to be thoughtful with our nearest & dearest, to be inclusive & remember those on their own or needing a helping hand, to take time to eat healthily, to walk that 15 minutes a day, to admire a beautiful day, to breathe deeply and to calm that rapid fear-based breath. Read more, less t.v. Move away from the virtual world and take five in the reality check zone. Learn something new…how about a foreign language? A humbling experience & a way to keep the mind active!

It’s the start of a New Year, with everything before us, second chances & new discoveries…let’s take five and accept the challenge.

Oh, yes…the real estate market…well, I think it’s hard asset investment time again, and that those who can will seek safe havens…both as a way to preserve capital and for personal safety/sustainability. Regions such as the Gulf Islands/Salt Spring Island and Vancouver Island will be on the shopping list. Inventory is medium, interest rates remain historically low, prices have reduced around 30 to 35 % between 2007 and now…sellers are highly motivated, allowing for further reductions at the point of an offer. An ideal time to be a buyer…. It may be that we are entering year seven of a seven to ten year cycle, and thus are already slowly on the way up…. Hmmm. Wish I could find where I put that crystal ball!

More information? Call me!

December, 2011, Salt Spring Island, BC

December, 2011.

The end of the year is a time to both look back, as a kind of summing up, with the benefit of hind-sight, and also a time to look forward, to dare a little, to make some projections.

The hind-sight part:

On looking back, it’s clear that entry level residential was the flavour of the month, IF a buyer could be encouraged to act. When I look at the “solds to date” info, for 2011, I can see that the bulk of the sales have been below $650,000. What doesn’t show on my “solds to date” info is the price reduction track…it only shows last list price plus the sold price. (Please call me for this definitive list…other solds info might be Board specific…mine shows the total sales picture).

The sales over $800,000 (few of them) tended to be waterfront options…many needing work to the dwellings…not move in ready…or, perhaps cottage/retreat, not “house” options.

In a down market, both fine oceanviews and undeveloped land options suffer.

When pricings come down by 30% (this is what appraisers surmise, between mid-2007 & present day), then the spread between fixer upper oceanfront and fine oceanview narrows. We are an island, and so the first choice is always oceanfront. Buyers will pick up a fixer-upper before they will view a state of the art oceanview option…ah, the water, the water!

The lack of interest in undeveloped land choices, no matter how delectable, even superb oceanfront options, is another indicator of a downmarket moment.

In a secondary home/discretionary marketplace (which describes Salt Spring Island & all Gulf Islands, plus Vancouver Island outside of core Victoria, the Sunshine Coast, & many of the B.C. Interior communities) no one “has to” buy anything…it’s all by choice, and the buyer is in control of the entire process, both the “where” and the “when” of all purchases.

In a downmarket, a buyer can put a second home, a recreational, a retirement choice “on hold”, thus.

An entry level price point purchase is either an opportunity for a local to buy (3 bed/2 bath home is the desire) or an investor looking for rental income might also act. It’s not necessarily an end user.

So, that’s the hind-sight view: for the past three years, the activity has been in entry level residential. The price of this has come up from $400,000 to $650,000, however, and this is a good sign.

No interest in undeveloped land (no one looking for a holding property, no one looking to build), no interest in businesses or in commercial/investment options, and little interest in the upper end residential pricings (any sales, and very few of them, saw huge price reductions at the point of the offer, even after significant price reductions en route to the sale)…typical scenario, then, of a downmarket syndrome in a discretionary area.

It seems to be widely agreed now that the U.S. Recession had begun in 2007. It’s also evident now that secondary home/discretionary areas, and globally so, had flattened in 2006. The Wall Street Journal, in January 2007, noted that all discretionary markets had become stable/inactive in 2006…meaning that inventory & pricing was stable & buyers were inactive. This inactive buyer scenario has been in place, in secondary home/resort based areas, from 2006 to present day.

Are we then in year six of a seven year cycle, and thus already on our way up?

Hmmm…wish someone could produce the crystal ball!

It is true that we are in a time of huge shift, and societally so. Economics is the pied piper, and the continuing geopolitical meltdowns continue. No business is exempt from the effects of the Internet, which has placed decisions in the consumer’s hand, and also has opened up the factor that someplace is now in competition with everyplace, re real estate options. It’s almost a given that if something “worked”, in business, even five years ago, it won’t now. No roadmap, then.

Downgrading of the U.S., Eurozone incipient collapses, the rise of China, the bailouts (money being printed?), earthquakes that cause economic loss as well as lives, severe weather problems, Arab Spring revolutions that upset 30 & 40 year patterns, the re-emergence of an autocratic Russia, etc etc etc…no place is exempt from the repercussions of change.

It used to be said that real estate was local…this is less and less true. The post-Internet world is the world of the meshed global village, and every place is affected and is in competition with every other place.

Different days!

The projection part?

Ah…now that is a daring thing to attempt, in this cloudy time of uncertainty. Would we call this moment the Age of Insecurity?

Let’s dare:

– if we are in year six of a seven year cycle then we should notice thinning inventory and increasing sales, perhaps by Spring, 2012.

– when inventory of good properties thins, and the buyer sees good value in buying real estate, most likely to preserve capital, then prices will start to rise.

– the sale of undeveloped land choices may signal this shift of market dynamics. If good residential inventory thins, then it makes better sense to seek land deals and to build, rather than to renovate severely a so-so option.

– with the continued bailouts, inflation may be the outcome to the past four years of maybe yes (inflation) / maybe no (deflation) debates. If so, buyers may choose discretionary real estate again, as that preservation of capital move…unique properties will be their quest.

– people may also look again at smaller communities, well apart from big city pressures…where sustainability is possible. The recent occupy movements, which crystalized diffuse anger, may encourage a seeking of a safe haven….

An aging population, a desire for a gentler lifestyle, a seeking of a location that offers the ability to enjoy the pleasures of life in the wired world of the 21st Century while still retaining the bliss of a “yesteryear” experience (of appeal to a young family), where all strata of a population and all demographics mingle…sounds a lot like a search for Salt Spring Island, or a nearby Southern Gulf Island…temperate climate, sustainable lifestyle, educational opportunities, rich cultural options, in the heart of the best protected boating waters in the world…it is special.

How may I help you to discover this lovely area? Benefit from my expertise and knowledge, of both inventory and of market trends. A full time and full service real estate agent, successfully connecting sellers with buyers, since 1989, I await your call.

How may I help you to buy your Salt Spring Island or Southern Gulf Island property?