Tag Archives: Pacific Northwest Coast

Market Analysis, December 2016, Salt Spring Island

A small geographic space with a world-sized heart…that’s a good description of Salt Spring Island and the Southern Gulf Islands.

Hastings House

Hastings House

The Islands Trust, created by the Provincial Government in 1974, with a mandate “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents, has effectively controlled growth on all the Islands via strict zoning/density bylaws.

Salt Spring Fire Department

Salt Spring Fire Department

If you go up in a floatplane, en route from Ganges Village on Salt Spring to Vancouver, you will see the large swathes of green on the Gulf Islands…a mix of provincial and federal park reserves, CRD park reserves, Conservancy protected lands, owner gifted or covenanted land…an amazing natural gift to visitors and residents alike. The Gulf Islands have all been preserved from unbridled development.

Important, though, in this non-municipal form of governance, that 1974 is paying attention to 2016. The big problem in cities and towns seems to revolve around affordable housing. This is a problem on Salt Spring, too.

There is a range of age-groups and affluence on Salt Spring…a broad spectrum of people desiring to live here. There are no work-rentals, no affordable buy-in living options, and very few choices for the aging boomers to move to, when downsizing. So…few starter homes, no rental apartments, few downsizing choices. Hmmm….

Salt Springers are being asked if they would like to become incorporated in a Gulf Islands Municipality structure. The two elected Trust people (two per island) & the Trust documents would remain in place. The day to day running of the island would be via an elected Council (one of whom would act as Mayor). Keep informed!

On Salt Spring, December brings craft fairs (WinterCraft at Mahon Hall, plus Fulford and Beaver Point Craft Fairs), seasonal theatre & choral events at ArtSpring, gallery openings, studio tours, light-up in Ganges Village, Christmas on Salt Spring events, pop up markets in the park…special menus in our superb restaurants. Seasonal delights await the visitor!

What about that real estate market?

And, what about that real estate market? As we close out 2016, one can look back and see an upticking market. After an 8 year downturn in the secondary home coastal markets (Sunshine Coast, Victoria, Vancouver Island, Gulf Islands), Salt Spring finally saw a shift into a dramatic sales volume increase between mid-March and the end of July. Buyers were mainly from Vancouver.

The unexpected and sudden government 15% tax for purchases by off-shore buyers, in metro-Vancouver, at the beginning of August, created a “pause” in all the secondary home coastal marketplaces…those sellers in Vancouver’s “hot market” had been the buyers in all the “by choice” regions. On Salt Spring, we “lost” August/September/early October. Then, around mid-October, things began to become busy once again.

The bulk of sales remain to a Vancouver buyer. Slowly, we are seeing renewed interest from Ontario. We may start to see sales from U.S. buyers…our low Canadian $ against the U.S. currency makes a real estate purchase here an interesting investment.

So many unknowables in the world: currency instability? Inflation/deflation? Equities or hard asset investment? Shifts in government? The impact of the post-Internet world just rolling on….

Change is the mantra of our immediate time.

Part of that: Boomers and Millennials. Different strokes for different folks. Important to understand the remarkably different ideas between these two significant demographics.

Stay tuned as well for the continuing changes to the real estate industry. Post-Internet dynamics change established models.

Salt Spring Island and the Gulf Islands are “by choice”/discretionary regions. The buyer has to first choose the specific Island…and then decide for the actual property on that particular Island. Time is a component of sales in all such secondary home/recreational areas…regardless of market trend in play.

Although it’s recent that sales volume increased (mid-March after 8 years of “flat”), prices have not yet increased. Stabilized, yes…and some properties have been selling for list price. Inventory is “thin”.

The 2017 real estate market kicks in here by mid-February. That’s just around the corner. At this time of year, some transactions will complete in January…perhaps for tax reasons. The process will have begun in this calendar year, though.

So…as we close 2016: strongest sales rhythm since 2006…very low inventory…price stability & sales at list price…all auguring for further improvement in the secondary home markets in 2017. The temperate climate and that slightly “apart” security of the Gulf Islands is also of appeal.

Market Analysis, September 2016, Salt Spring Island

Salt Spring Island

Salt Spring Island

Beginning of the Fall Market

So…we begin the Fall Market…here it is, the beginning of September. The calendar says summer goes on till the 20th, but most of us see Labour Day Weekend as the “end”.

Sales volume in the Spring/early Summer market has gone up markedly on Salt Spring Island, in residential properties below $750,000. Over that price point, it remains softer.

In that entry-level residential segment, though, it could be described as sellers market conditions.

What does a seller’s market mean? Limited inventory plus strong buyer demand creates a seller’s market. Price escalation occurs with lack of product.

In a Gulf Island region, there is always a limited inventory

In a Gulf Island region, there is always a limited inventory. The Islands Trust, a provincial government body created in 1974, with the mandate to “preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents, also effectively “capped” growth.

On Salt Spring Island

On Salt Spring Island

Growth in the Gulf Islands is controlled by strict zoning/density bylaws. On Salt Spring, commercial zoning is focused in both upper and seaside Ganges Villages, and they can’t expand beyond their boundaries. The small commercially zoned options at Vesuvius, Fulford, and Fernwood cannot expand. Home occupations are encouraged, but there are rules around these usages, too.

As soon as growth is limited, values do appreciate over time. Between 2002 and 2005, prices escalated by around 60% on Salt Spring. Then a pause developed in 2006 and 2007. Late 2008 delivered the global economic downturn, and secondary home/recreational areas (globally) saw a sharp fall-off in activity. Between early 2009 and early 2015, prices locally had reduced by around 45%.

Buyers who acted between 2013 (the “worst” year?) and late 2015, have benefitted by that dramatic levelling off of prices, in the secondary home markets. It’s difficult for people to act before clear signals of a market shift are in place…those who do act seem to have that “wolf’s sniff the wind” directional arrow.

Important always, though, to be looking down the highway and not in the rear view mirror…opportunity is ahead.

By late 2015, one could see an improving trend coming into play in the secondary home markets. The Sunshine Coast and the Okanagan saw renewed activity in the Fall of 2015. Early Spring brought action to Victoria and to some Vancouver Island communities. Mid-Spring delivered activity to the Gulf Islands. Salt Spring (perhaps because of its year-round lifestyle opportunities) usually shows market improvement first, among the Gulf Islands choices.

The interesting thing is the change in the buyer profile for Salt Spring and the Gulf Islands: almost 100% from Vancouver.

Traditionally, a Gulf Island buyer has come from Alberta (perhaps 20% of coastal buyers?) or from the U.S. (perhaps 30% of coastal purchasers?). This time, it’s buyers from Vancouver, who have sold during the extremely “hot” market there. They are seeking new areas to reside…not just recreational/seasonal buyers, thus.

These previously Vancouver based buyers will live here year round, and that has all sorts of good outcomes for the day to day business life on the Island. Shop Local becomes a viable item when there is a year round resident, and not just a seasonal impact.

Within the past 11 weeks, sales volume dramatically rose (perhaps tripled?) in the entry-level residential segment. On Salt Spring, that would be between 300,000 and 750,000. Low inventory with high buyer demand leads to price escalation. Couple that with an area with a no-growth policy (Islands Trust) and you can see that we may be returning to that 2002 to 2005 model.

Opportunity continues to exist in upper tier priced residential, in undeveloped lots and acreages, in recreational cottages/cabins, and in commercial options. These market segments have not yet seen the quick sales of the entry level priced residential properties. As these property categories start to sell (and they are slowly becoming more and more active), and inventory begins to thin out, price points will also stabilize/rise.

The sales stats to date break out as follows.

January 1 to August 28 “solds to date”:

  • 26 sales between 1 and 200,000.
  • 29 sales between 2 and 300,000.
  • 47 sales between 3 and 400,000.
  • 45 sales between 4 and 500,000.
  • 44 sales between 5 and 600,000.
  • 26 sales between 6 and 700,000.
  • 10 sales between 7 and 800,000.
  • 9 sales between 8 and 900,000
  • 5 sales. between 9 and 1 million.
  • 16 sales between 1 and 2 million.
  • 3 sales between 2 and 3 million.
  • 2 sales between 3 and 4 million.

There is always opportunity in any market trend. Creativity wins the day in a discretionary region. A buyer’s market means lots of inventory and few buyers. A seller’s market means little inventory and lots of buyers seeking.

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.

July 2014, Market Analysis

The main real estate sales window on the Pacific Northwest Coast seems to have evolved into a Summer/Fall market.

This may be the case on Vancouver Island, on the Sunshine Coast, as well as on the Gulf Islands.

Secondary home/discretionary markets have a different pattern from primary residence/city markets. “By choice” regions have been slow to recover from this past six year downturn.

At this very beginning of July, the uptick does appear to be underway, although it’s not an even-handed recovery & most sales to date still remain in the entry-level residential category.

It’s essential for a seller (& their realtor) to showcase listings throughout the year, in order to attract that mainly non-local buyer profile…but the physicality timeline for this non-local potential buyer to visit an area/view properties will mainly occur in July/August/September/October….perhaps into early November, depending on Fall weather pattern.

Salt Spring Island

Salt Spring Island


Along with this later arrival time, to view property opportunities, we are also seeing more “interviewing of areas” first.

With the “boomer” retirement wave just starting, & a strong desire from many Canadians from other provinces to choose a coastal retirement location, it makes sense that they might vacation here a good year or two before actually moving to a specific location.

Thus, Salt Spring & the Gulf Islands & Vancouver Island are in competition with each other…the potential purchaser has to “buy” the specific locale, first, before seriously looking at a property to purchase. Why here? Why not there? Serious questions!

The Internet search engines do allow a global discovery/audience. All that potential choice of destination, though, can make decision-making slower…if one can go anywhere for a retirement or a recreational choice, then that very broad choice parameter might lead to hesitation in decision…one wants “to be sure”.

Hmmm….

Regardless of market trend, it can take one to three years to sell a specific property in any particular secondary home area. Time is always a component in the choice dance. Buyers set markets, not sellers or realtors. It’s only very recently that buyers are once again looking at the secondary home/recreational marketplaces.

The good news? Slowly slowly that secondary home/recreational marketplace is on the uptick, after that 6 year downturn. While mainly busy in residential sales of properties below 700,000, in the Gulf Islands/on Vancouver Island, the “real season” is just beginning…by October, sales should be occurring in all property segments.

Li Read Group

Li Read Group


For Salt Spring Island, the Gulf Islands, Vancouver Island? Slow but sure recovery…& eventually activity will be seen in all price points/property types.

Our market sales window has truncated down to July/August/September/October.Offers may come in later, but chances are that the viewing took place in those four intense months.

If a realtor is actively presenting a property, year-long, then a seller needs to have faith that they will deliver a buyer in the physicality timeline. The sale process is a slow one, for many reasons, in all secondary home markets.

In lieu of a monthly market update, this 2014 recovery year, I plan to let July/August take place…by mid-September, the shift should be clear, with provable statistics. Will report back in with verifiable statistics then, as opposed to reasoned projections right now. Important to let the beginning weeks of our “real market” take place. The rhythm/speed of our recovery is not yet totally clear.

Meantime, any questions, please contact me. I offer weekly driveby lists of all listed properties (not just board related options), plus weekly “solds to date” reports of all sales (not just board related options). The full information is thus always possible with me.

In September, I will report back with the total “actuality”, to that point. Meantime, it’s Summer, in the supremely beautiful Pacific Northwest Coast…enjoy!

Looking for your special piece of paradise? Your best interests are my motivation.

Whether buying or selling, please contact me for excellent service & all information. Knowledge is key.

June 2014, Market Analysis

Well, here we are at the beginning of June, a half-way point in our calendar year…yet only the beginning of our main sales window in our secondary home/discretionary marketplace.
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Our busiest viewings/potential sales timeline has truncated down to mid-May (two holiday weekends) to mid-October (Canadian Thanksgiving Weekend). The most active months are July/August/September.

These summer season months dovetail with the boating season in our beautiful protected marine environment.

It used to be that our Salt Spring Island & Gulf Islands destinations were seen as “seasonless”…people would pop in as visitors & as potential buyers throughout the year, although with summer obviously still being the busiest time.

Post-Internet, though, decisions as to tourism destinations are global & Hawaii, Mexico, Florida, Arizona, Palm Desert, the Riviera, Spain, Portugal are seen as winter season ports of call…plus New Zealand & Australia, with their summer in our winter.

payphone

The entire Pacific Northwest Coast, then, has become this seasonally oriented tourist destination…late Spring, Summer, early Fall. I do believe that tourism drives real estate sales in all discretionary regions, & globally so. A shortening of a visitor timeline affects all resort-based area business.

Post-Internet, a potential property buyer also has huge choice as to where to buy that second home, whether for future retirement or recreational for now….

Choice. Too much choice means that it’s difficult to make a decision. An extra element of the post-Internet world.

Time lags for many reasons are a feature of all purchases in any secondary home/discretionary region…including on Salt Spring & the Southern Gulf Islands. Patience, then, is necessary on the part of both sellers & realtors. The buyer propels a market in any “by choice” area.

After a long six years of suppressed conditions, with price reductions between 29 & 45%, depending on property involved, with properties remaining on the market between 2 & 7 years, this year has so far seen a serious uptick in sales volume activity on Salt Spring Island.

Though still mainly busy in the entry-level property segment, the inventory in this category has also been “thinning out” & price points have thus been rising…it was the busiest March Break in six years. This early point in our ever shorter sales window usually foretells our main selling season…summer/early Fall. All good news, then, at this beginning of June moment.

June is often oddly quiet, until the final week. Until summer, it’s a weekend business. The Gulf Islands are recipient markets, buyers are not local, & a tourist visit often creates a real estate sales result.

To date, most sales remain below $800,000, mainly residentialwith the majority of sales below $600,000. A scant handful of sales are over one million. These are early days in our short seasonal market, & a true picture of this 2014 “year of recovery” may not be clear until late August.

One marker of authentic market shift, in an upward direction, would be the resurgence of the undeveloped land category.

There are many societal shifts underway right now. A seeking of a safe haven might be the reason for a return of interest to the secondary home marketplaces…including in the Canadian Gulf Islands.

The ability to be self-sufficient, the proximity to major centres, the peaceful allure of yesteryear in everyday life, the sense of community with all the 21st Century amenities at hand, with a temperate micro-climate, & in the heart of the best protected boating waters in the world…Salt Spring Island & the Gulf Islands are practically perfect.

Looking for your dream Island property? Call me! Your best interests are my motivation. I work for you!

There are many stellar properties awaiting your discovery: waterfronts, oceanviews, farms, vineyards, building opportunities, commercial/business options, acreages/lots…call me, & let’s view. This may be the tail-end of the buyers market….

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

Simple Pleasures

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Small pleasures are important to hang onto…& to enjoy.

In this beautiful Pacific Northwest Coast area, the sea usually features. Perhaps it’s just the pleasure of watching it…a deck or a patio, with an ocean vista, and the inspiration of sun and sea and sky’s breadth.

Sometimes, it’s the sleek freedom of sailing…the whisper of the sails in light airs…the sight of seals, sea lions, seabirds…gliding…maybe in the distance a pod of whales.

Sometimes, it’s hiking along a forest trail, emerging onto a beach, wading…maybe having a picnic at shore’s edge.

The news daily reminds us all is transitory. Remember to partake of those small pleasures…with family, with friends, with oneself…depending where on life’s road we find ourselves, small pleasures ignite our days.

Take five…

Enjoy.