Tag Archives: Pacific Northwest Coast

Market Analysis, August 2018, Salt Spring Island

August 2018, Salt Spring

The Mid-way Point

The first of August reminds us all that summer-summer is at the mid-way point.

Salt Spring Island

Salt Spring Island

Well, for those with school-age children that’s certainly the case…summer is over with the back-to-school ads.

The calendar, though, says summer ends on September 20th.

The real estate market on Salt Spring and the Southern Gulf Islands became a summer/fall market, some years back. Many sales take place between August and December. So…for real estate, summer and fall remain busy.

Sellers who panic when July folds into August need to remember that the main business on Salt Spring is just ramping up.

And what about that business? Thin inventory in any property type below one million is a fact. Prices have stabilized. There are both small bidding wars and back-up offers.

Although the market segment between one and three million is a slower paced sales pattern, that more affluent buyer also tends to turn up from August on. There is also a growing interest in estate style properties between 2 and 5 million (Canadian Dollars).

No matter the property type or the price point, the inventory is the thinnest I can remember, since 2003.

Salt Spring Islands Trust

Salt Spring is governed by the Islands Trust. This provincial body was formed in 1974, with the mandate “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. This cap on growth maintains a pleasing and community based lifestyle. A “yesteryear” experience coupled with everything required for a 21st Century life…a winning combination. It’s also a reminder of Economics 101: low supply coupled with high buyer demand create price increases.

Sellers and realtors do not create markets…buyers do that. The Gulf Islands were in an almost nine year downturn (late October, 2008 to mid-2016), as a result of the economic meltdowns of late 2008. Buyers vanished in those downturn years, and sellers lingered on the market…price reductions did not generate action. That was the classic buyer’s market (lots of listings and no buyers).

Now, we are in the classic seller’s market in the recreational/secondary home marketplace of the Gulf Islands: low inventory and lots of buyers. During the slow recovery of mid 2016 to late 2017, there was a sales volume increase in that entry level residential segment.

At the moment, as we start into August, most buyers are seeking residential options between 650,000 and 1.3 million. In waterfronts, we are seeing interest between one and three million. With the main part of our sales window still before us, there is an expectation that we may be looking towards significant price increases by 2019. If so, it will be based on continuing lack of inventory and the continuing return of buyer interest.

Government-Induced “Pauses”

There have been many government-induced “pauses” during the current slow market recovery. It is true that in all areas, city or rural, there is a lack of affordable housing and/or work rental options. Salt Spring struggles with this, too.

The current provincial government has turned to taxing an owner’s asset (their primary or secondary home) via severe taxation measures, in an attempt to create both affordable homes and a rental stock….this does not alleviate the problem. It may actually make things worse.

Vancouver is experiencing these taxation measures and the Lower Mainland market outcomes do affect the Gulf Islands. (The Gulf Islands are exempt from the vacancy tax, because they are part of the Islands Trust).

Yes, in 1974 the then provincial government capped growth on every Gulf Island…now, in 2018, we see the outcome of this 1974 decision…never a lot of listings and varying buyer desire patterns…it keeps choices lower and prices higher. In 2017, Salt Springers voted (63%) to retain the Trust, without change, as the form of governance.

Where do these buyers for the Gulf Islands come from? In the early 2000s, we saw a lot of buyers from Alberta and the U.S. After the economic crash of late 2008, this buyer profile disappeared.

The recovery that slowly began in 2016 was driven by Vancouver sellers. The Vancouver area still supplies most of the buyers on Salt Spring. This is why we pay attention to the real estate rhythms of Vancouver…those sellers have become our buyers. Any market cooling there will affect sales here.

Any questions about the changes to the Real Estate Services Act of B.C., which came into being on June 15? Call me.

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, March 2018, Salt Spring Island

March 2018, Salt Spring

Salt Spring Island

Salt Spring Island

March…it brings with it “real Spring” (the one marked on the calendar), plus is the beginning of our main grid of sales activity.

Beginning of the Canadian Market Season

March Break to the Canadian Thanksgiving Weekend (mid-October) signals our “season” in our secondary home/discretionary/recreational region.

The busiest months are July, August, September, of course, and these months also encompass high tourist season, but holiday weekends in earlier months, and school holidays (March Break), begin the rhythms.

March is beginning with very little inventory for sale. High buyer demand (in the entry level residential segment) continued throughout January/February, in spite of weather hesitations. There may be some few new listings yet to come onstream, but there is much less choice for a buyer.

The definition of a buyer’s market: lots of listings and very few buyers. A seller’s market? Few listings and many buyers. This scenario often leads to higher list and sale prices.

Sellers and listing agents do not set markets. Buyers do that. Strong buyer demand and few purchase choices create rising values. The economic maxim of supply and demand is a real one.

There are always opportunities for a buyer in a seller’s market. If interested in a property, though, one must be prepared to act. Bidding wars are rare on a Gulf Island…but back-up offers do come into play.

How will new tax affect real estate market?

The new coalition provincial government raised the offshore purchase tax to 20%, at their February budget. It still applies to metro-Vancouver, but now will also apply to Victoria, to Nanaimo, and to Kelowna. For Salt Spring, many buyers are from Vancouver and the Lower Mainland. Will the tax create a hesitation in sales there, as the initial tax did in August, 2016? Those sellers in Vancouver have become many of our Island buyers.

The provincial government is stating that they are bringing in empty home taxes, in an effort to stop speculation…in their words: to stop people treating the housing market as a stock market. They tie this to the affordable housing crunch, which is a feature of all communities, but this also involves the B.C. Tenancy Act (many people choose not to rent their homes).

I write these market updates at the beginning of each month, and do updates via my blog, as the month proceeds. Check out my blog for March 1st. It gives the Vancouver Real Estate Board’s recap of the February Budget. There is some confusion right now, but the offshore purchase tax (at the moment) only applies to Vancouver, Victoria, Nanaimo, Kelowna.

Changes to the Real Estate Services Act of B.C.

Changes to the Real Estate Services Act of B.C. were meant to take place by March 15th. The government wasn’t ready with courses for realtors, or with new contract forms paperwork, for the proposed substantive changes. The date has now been set for June 15th. Until then, it’s business as usual.

2018 seems to be a time of change. For Salt Spring and the Southern Gulf Islands, locked into a form of governance from 1974 (Islands Trust), we might appear to be a time tunnel, but these beautiful islands are on the doorstep of major centres (Vancouver, Victoria, Seattle), and being slightly “apart” does not mean isolation.

It is now stated that all knowledge we possess right this minute will be replaced within 18 months. Hmmm…. The creative response of the artist may be needed more than ever.

Meantime, technological shifts are streaking right along, in our post-Internet world: crypto currencies, block chain investing, 3-D printers, robotics, artificial intelligence (will those machines out-think us?), driverless cars, smart homes, smart phones, online lives, meshed reality…. Hmmm….

1974 is beginning to sound pretty good? It still exists on the Gulf Islands…thanks to the Islands Trust. One can always go out to visit and sample the “always on” world and then come back home to your chosen island.

Are you seeking a Salt Spring Island or Gulf Islands property? Call me. Your best interests are my motivation. Benefit from my knowledge, expertise, and negotiation skills.

Salt Spring offers an authentic artists community, a temperate climate that sustains vineyards, olive groves, small holding farming, plus encourages appreciation of the preserved natural beauty. “Discover Yourself Here” is the tag line of the local Chamber…and it’s true.

Market Analysis, September 2017, Salt Spring Island

September, 2017

Salt Spring Island

Salt Spring Island

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Hmmmm…outcomes in September, thus.

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

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

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

Market Analysis, May 2017, Salt Spring Island

Salt Spring Island

Salt Spring Island

May 2017

May to end of September might be the main grid of tourism and real estate activity on the Gulf Islands.

Real estate sales do take place throughout the year, and in a way the Gulf Islands and Salt Spring Island can be described as “seasonless”, but the predominant arrivals time for the mainly non-local buyer profile does fall between these late Spring – into – late Summer months.

Hastings House, Salt Spring Island, BC

Hastings House, Salt Spring Island, BC

Hastings House, Salt Spring Island, BC

Hastings House, Salt Spring Island, BC

The Islands are in the heart of some of the best protected boating waters in the world, and the boating season coincides with this early May to end of September timeline.

After an eight year downturn (end of 2008 to early Spring 2016), the secondary home/discretionary markets on the Pacific Northwest Coast began to see an improving trend, throughout 2016, in both tourism and in real estate sales. This upward trend has continued in the first months of 2017.

I think there is a direct link between a successful visitor experience and a decision to purchase a property, in all discretionary and recreational regions.

A buyer has to choose “for” a place first…and then will choose “for” a property in that place. This is why it can take longer in a secondary home location, regardless of market trend in play, for a sale to take place…the buyer has to be sure about the region choice…that’s step one, always.

It is, however, quickly turning into an authentic seller’s market on Salt Spring Island and the Southern Gulf Islands…and in Vancouver Island communities, too.

A seller’s market is characterized by few listings and strong buyer demand.

In the beginning, prices stabilize…buyers have to offer closer to or at sellers list prices…then back-up offers, multiple offers, offers over list become next steps, if a property is unique or listed below market. Price rises follow. The law of supply and demand governs all markets.

Hmmm…. Yes, there are fewer listings, and yes, prices have solidified…but there are always opportunities. Seeking a Gulf Island/Salt Spring Island property? Call me, for suggestions on how to make the current market work for you.

Our 2017 Spring has arrived a good 4 to 6 weeks later than usual…it seems more like early April, not early May. This past winter was one of the once-every-twenty-years La Niña events….lasted from Dec 3 to March 12 (even skating on Cusheon Lake!). The last part of March and most of April have remained unseasonably cool and also rainy. Apparently, precipitation records have been broken.

May is welcome!

Sales at close of April:

  • 7 sales between 160,000 and 199,500.
  • 6 sales between 200,000 and 299,000.
  • 11 sales between 305,000 and 396,000.
  • 16 sales between 400,000 and 487,000.
  • 11 sales between 506,250 and 599,000.
  • 7 sales between 625,000 and 690,000.
  • 4 sales between 710,000 and 769,000.
  • 5 sales between 800,000 and 899,000.
  • 2 sales between 900,000 and 945,250.
  • 5 sales between 1,075,000 and 1,750,000.
  • 3 sales between 2,200,000 and 2,500,000.

The trend is clearly towards less inventory in all property types and price points. The main sales are still below 750,000. Upper tier priced residential offerings are now also starting to see interest and subsequent sales. Undeveloped land sales are on the increase.

The buyer profile still is mainly from Vancouver, with smatterings from U.S., Ontario, U.K., Europe, China. Alberta is still not yet seen as a strong buyer profile, although that buyer had been involved in about 20% of sales in previous years.

Sales will start to be less, compared to 2016 statistics, simply because less inventory is available.

The referendum asking Salt Spring whether to incorporate or not will be held on September 9th. The Trust documents will remain in effect in a “yes” vote (these documents govern all of the Gulf Islands and this provincial government body, the Islands Trust, has been in place since 1974). The CRD (Capital Regional District) will still have a presence. Two trustees and one CRD director will still be in place. The difference: a mayor and council will be elected locally, to manage Salt Spring locally. At the moment, decisions are often made by off-island parties. More information? Be informed. It may be time to introduce 1974 to 2017…important to have all information and to be thoughtful about your response to the yes/no question on September 9th.

May welcomes in several events as part of the Canada 150 celebrations. These events began in mid-April and will continue through to early October…150 days of celebration events. July 1st is Canada Day. Time to be on Salt Spring! (P.S. the Flower Power event is encouraging gardeners to plant red and white flowers).

The great Pacific Northwest Coast is a superb locale at this time of year, and Salt Spring Island and the Gulf Islands are a part of this coastal allure. Enjoy!

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.