Tag Archives: Pacific Northwest Coast

Market Analysis, October 2018, Salt Spring Island

October 2018, Salt Spring

Ganges Harbour

Ganges Harbour

We are now well into Fall…all the Harvest events, Farmers Markets, farmgate stands are busy inviting us to enjoy this fruition time.

Early Fall is a mix of rainy days, sunny days with almost summer warmth in afternoons, darker mornings and evenings as the days shorten…plus crisp evenings perfect for star watching. And yes, that is Orion, the Hunter constellation, creeping up the sky…the herald of Winter.

The Fall Market in real estate on Salt Spring and the Southern Gulf Islands can be busy. Buyers may have come in late Spring/Summer to “look”, but they often wait till Fall to offer.

People looking at properties on Salt Spring, right now, are seeking permanent homes…they are not, in the main, looking for recreational options.

That’s actually a change. In previous years (up to the economic meltdowns of late 2008), we saw many Albertans & U.S. buyers on Salt Spring and the Southern Gulf Islands. These were recreational buyers…this was not their primary residence.

Post-recovery (mid 2016), the main buyer profile became a Vancouver buyer…who had sold in their venue for large dollars. They were seeking a destination to move to…they were not recreational buyers.

So….in seeking that “forever” destination, Salt Spring garnered competition: Sooke/Metchosin, South Cowichan, Courtenay/Comox…hmm…why your area? Why not theirs? Good question!

Islands Trust

On Salt Spring, which is a part of the provincial government mandated Islands Trust (in place since 1974), one understands that development is “capped”. What you buy is what you get. There will not be myriad new subdivisions opening up. A cap on growth also delivers (over time) an increase in valuations: low supply & generally high buyer demand does, in the end, result in price escalation.

Salt Spring offers a hospital, great ferry connections (three ferries with year-round schedules: one to Vancouver, one to Victoria, & one to mid-Vancouver Island), year-round regular sked floatplane services (to Vancouver Airport, to downtown Vancouver, to Seattle, to Maple Bay on Vancouver Island), 3 elementary, a Middle School, a state of the art Senior School, plus indoor pool, plus Arts Centre (ArtSpring), plus alternative health opportunities, plus a strong artistic/cultural base, and…the list goes on. Salt Spring is an eclectic and vibrant Island, with a year round lifestyle.

The real estate market on a Gulf Island, including on Salt Spring Island, is always dependent on outcomes in the areas that generate the buyers. Since mid-2016, that has been a Vancouver buyer.

The current provincial government has purposefully been making taxation decisions that will suppress a real estate market. Their intention was to cool the market in Vancouver, and also in Victoria, Nanaimo, Kelowna. Their measures have worked…sales have softened in Vancouver. As a recipient market, dependent on non-local buyers, Salt Spring may feel the effect of this suppression. It may take longer to achieve a sale and prices may reduce.

Kinder, Gentler Lifestyle

That said, there is a huge desire for Vancouver residents to leave the city and Salt Spring is one of the locations they consider. Perhaps the Vancouver potentials will simply end up accepting the prohibitive tax measures in their area, and decide to just get on with things. That strong desire to live a kinder, gentler lifestyle may continue to uphold the Salt Spring and Gulf Islands markets.

At this moment in time, early October, listing inventory remains thin and buyer desire remains high. Over half of the Salt Spring listings are priced over one million. A very thin residential inventory available below 900,000. Hmmm…. To remain in the entry level pricing category, a buyer might be best served by purchasing undeveloped land and building a cottage or studio. It is a struggle to find a residential property, below 750,000, that does not need serious renovation work.

Meantime, in this era of consistent and constant change, it is a gift to visit Salt Spring and the Gulf Islands…to experience a lifestyle rooted in 1974 (the year the Islands Trust was created, by the provincial government). If one can also consider living here, one immediately understands that all the necessities of a 21st Century experience are available…though wrapped in the charm of 1974. Fall is a superb season to discover the Gulf Islands.

Market Analysis, September 2018, Salt Spring Island

September 2018, Salt Spring

The beginning of September…still technically summer, yet somehow accepted as early Fall. All those back to school memories, perhaps, signalling a season change?

The Fall Market in Gulf Islands real estate can be busy…September/October/November do see a lot of sales going through. Perhaps buyers looked earlier, but they often wait till early and late Fall to “act”.

Some Statistics …

As we start into September, on Salt Spring there are approximately:

126 residential offerings CURRENTLY LISTED:

  • 60 below 1 million (309,900 to 995,000)
  • 66 over 1 million (1,020,000 to 4.8 million)

There are approximately 90 lots/acreages CURRENTLY LISTED:

  • 79 of them between 159,000 and 995,000
  • 11 of them between 1,020,000 and 2,495,000

There have been approximately 145 SALES TO DATE

  • 124 of these sales ranged between 155,000 and 999,000 (with most of such sales coming in below 800,000)
  • There were approximately 21 sales between 1,005,000 and 2.85 (with most between 1,005,000 and 1.95.
  • Only two sales over two million (2.15 and 2.85)

Most sales above one million were waterfront properties. (The “solds to date” include residential and undeveloped land options).

Over half of Salt Spring’s residential zoned listings are priced over one million, while (to date) most sales are below 900,000.

Time to sell or buy? Are we in a balanced market?

The current coalition provincial government’s February 20th budget brought in several tax measures that were meant to cool “hot” real estate markets. Vancouver, Victoria, Nanaimo, Kelowna were specifically targeted by these measures.

For many Vancouver Island communities and Gulf Islands, including on Salt Spring, the main buyer profile for past 18 or so months has been a seller who had previously sold in Vancouver and was then seeking a new home location. The measures to halt Vancouver’s market have worked…and abruptly so. That primary residence market has softened markedly and Salt Spring’s recipient market has also softened in response.

Government intrusion, then, mainly targeting Vancouver, has also affected our local Salt Spring and Gulf Islands market.

Real estate boards like to call this kind of a slow down in action a “balanced market”.

A buyer’s market is characterized by many listings and few buyers. A seller’s market is about few listings and many buyers. This often leads to price stability, and then can lead to price escalation.

Is a balanced market somewhere in between, or is this just “realtor speak” to put a positive spin on a changing market? Too soon to say.

The late summer/fall market can be a busy sales window on the Gulf Islands. It has been this way for several years. If new listings don’t pop onto the market, and buyers consistently want to be here, then we will see many more sales as we go through to year end…low inventory, coupled with buyer desire, maintain a seller’s market.

I do this market report at the beginning of each month, and do updates via my regular blogs.

At this exact moment in time, the very beginning of September, it seems that there is a hesitancy afoot. It may be a momentary reaction to the B.C. government’s move to soften real estate markets…by late October, we will see if there have been further repercussions.

Sellers and buyers are disturbed, in Vancouver, about the measures to halt that market’s rhythm. Non-local buyers are reluctant to encounter the speculation (vacancy) tax, the offshore purchase tax (now 20%), and the extra schools tax for properties assessed over 3 million. The vacancy tax and schools tax apply to local owners, too. (Luckily, Salt Spring and all Gulf Islands were exempted from the speculation (vacancy) tax, on March 26th).

That pausing in the Vancouver primary residence marketplace has outcomes on Vancouver Island and on the Gulf Islands. Salt Spring is not immune to market forces in other areas.

Alberta and the U.S. buyers (once 50% of Salt Spring’s buyer profile, before the economic meltdown of 2008) have not reappeared. Vancouver remains the principal engine of activity in all coastal communities.

Harvest Time

This September/October will tell the tale of the 2018 market. We begin this new month, at this lovely harvest time of year, with thin inventory in all property categories/price points. Buyers are still around, but mainly seeking residential properties below 900,000. Will we see continuing clear out of inventory, perhaps at a slower pace, or will activity plateau due to the government intervention to suppress “hot” markets?

Hmmm…stay tuned.

Meantime, here we are, folding into the poet John Keat’s evocative description of Fall…“season of mists and mellow fruitfulness”. Many things are there to delight us on Salt Spring Island: Fall Fair, Farmers Markets, studio tours and gallery openings, Sip & Savour, harvest dinners in our great restaurants, craft fairs, Apple Fest, Canadian Thanksgiving…and there is much to be thankful for on this special Island. More info? Call me!

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 NiƱa “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.