Tag Archives: Real Estate

Market Analysis, November 2018, Salt Spring Island

November 2018, Salt Spring

The Fall Real Estate Sales Season

November 2018, Market Analysis

The Fall real estate sales season separates into two parts: late summer/early Fall (end of August to mid-October) and late Fall (mid-October to early December).

Salt Spring is really a “seasonless” market…buyers turn up throughout the year, and sales from later in a calendar year can take place right into very early January of the following year.

Although tourism is most evident in late Spring/Summer months, and a successful visitor experience usually leads to a real estate purchase in our discretionary marketplace, the two don’t always occur at the same time.

It often takes two visits, if not three, for an interested potential buyer to decide to make an offer. There can be substantial time lags between visits…it can take one to two years to have a successful sales transaction, even in a buoyant real estate trend.

Where Do the Buyers Come From?

Buyers are not local. They look in other areas, too. It’s perhaps about “being sure” about the “where”.

Whether they live a ferry trip away or are a substantial flight distant, the buyer usually leaves some time between visits (a few weeks to several months). Their own lives come first and it just takes the time it takes to have a result in any secondary home/discretionary marketplace.

That said, we enter November 2018 with a continuing “thin” inventory of available listings.

Prices stabilized in Fall, 2017.

The provincial government’s February 20, 2018 budget included taxation measures to cool the Vancouver market.

These measures were also expanded to include Victoria, Nanaimo, and Kelowna.

Since mid-2016, Salt Spring has been chiefly dependent on Vancouver buyers. As a recipient marketplace, Salt Spring is affected by events in the areas where the buyers come from.

Anecdotally, it seems that people take around five months to get over anger at something and then to just get on with things. The lack of solid action between February 20 and September 15 has now been replaced with some increased activity. Hmmm….

The last two months of a year and the first two of the following year can be seen as a cohesive timeline.

A Market Trend for properties below 900,000

The market trend right now is showing most action in properties below 900,000. Over half the current listings are over one million. Will we see substantial price reductions at the point of an offer, in order for a transaction to proceed to completion? Will prices begin to suppress, to reflect those marked reductions now evident in Vancouver? Are we starting back into buyer’s market territory? Hmmm….

November 2018, Salt Spring Real Estate Market

Although there is a lovely sense of apartness to the Salt Spring lifestyle, no location is exempt from global issues. Currency concerns, tariff wars, prohibitive tax measures, etc…outcomes in countries around the world also end by impacting SSI. There’s that butterfly concept again.

Uncertainty is not good for any market. We began 2018 with a strong seller’s market underway. We are ending 2018 with the impacts of the coalition provincial government measures to suppress that Vancouver “hot market”. These measures, short term, have been successful.

At the same time, there does seem to be renewed interest out of Ontario (other provinces like to retire to coastal communities). Toronto does not have the tax suppression measures seen in Vancouver. That may augur well, going forward into 2019.

Albertans & US Buyers?

We are still not seeing Albertans or U.S. buyers. Before the economic meltdowns of late 2008, these two buyer profiles were 50% of our buyers. They were also seasonal. The Vancouver buyers want to live on Salt Spring. This may be why they take longer to choose the “where”. Salt Spring has competition from nearby Vancouver Island communities…why choose here? Why not there? Hmmm….

Late Fall-into-Winter season, a softer time for tourism, is also an opportunity. The fallow field moment allows for some creative thinking, to keep that Salt Spring allure in play. The outcomes of the “real” 21st Century are around us all…Salt Spring is not exempt from the profound technological changes that are now the surround sound of our lives. Yes…block chain technology is our present.

Initially, the Islands Trust, created by the provincial government in 1974, had the purpose of preserving the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents…the Trust capped growth and effectively created a park-like ambiance. Now, in our always-on, always-connected world, perhaps the real value of visiting and of living on Salt Spring Island is the ability to enjoy an experiential lifestyle…and not a mere searchable environment.

The Gift of Reality

The gift of reality…real reality, not virtual, not augmented…perhaps that’s the point of 1974 meeting up with 2018?

Markets are always a wave of up and down. Over time, an investment in real estate, in an area where growth is strongly controlled, where a community blueprint pays homage to 1974 concerns about over-growth, will become an enclave area…it will rise in value. Important, then, to always be thinking five years out.

At this moment in time, listings remain low, buyer interest is very present, and the allure of Salt Spring as a destination is high. Projections for early 2019, in areas that deliver buyers to Salt Spring, are about a bounce back in real estate dynamics. Hmmm….

Meantime, November unrolls before us: craft fairs (WinterCraft), Village galleries showcasing their artists, studio tours, continuing Farmers markets, theatre and dance and choral presentations at ArtSpring, hiking/walking trails beckon, and kayaking adventures and sailing races delight year-round.

There’s always lots to see and to do, on special Salt Spring Island.

Enjoy the softer season!

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, May 2018, Salt Spring Island

Salt Spring Island

Salt Spring Island

May 2018, Salt Spring

It may be that the Islands Trust (created and put in place, in 1974, by the provincial government) will have done more than “preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents.

It may be that the Trust will also have preserved a way of life that is disappearing, globally.

The outcome of the technology era, with artificial intelligence, with robotics and virtual, meshed, augmented realities, is rapidly changing our culture.

These technological outcomes make all knowledge, as we understand it right now, outmoded within 18 months. Speed of change continues to ramp up.

It really is like Alice Through the Looking Glass: we have to run very fast just to stay still. It’s interesting that this supposed children’s book, from the early days of the last century, was written by a mathematician. Hmmm…..

All of our cultures, globally, are undergoing massive change. Marshall McLuhan, back in the 1960s/70s, noted that “the medium is the message”.

Meanwhile, there sit the Gulf Islands, firmly anchored in 1974. Hmmm…..

Preserve & Protect?

In severely curtailing growth, through strong zoning/bylaws, since 1974, the Trust maintained the “preserve and protect” mandate. On September 9, 2017, Salt Springers voted 63%, in a referendum, to retain the 1974 form of governance, without change.

Will the Islands rise in value, so that only the very wealthy will be able to afford the properties? Will they be seen as places to recharge, to experience “real reality” in its authentic form? Will they be seen as Shangri-La opportunities…restorative withdrawal niches? Hmmm…

Change is with us. In change lies opportunity.

How do you envision these time tunnels known as the Gulf Islands, in two years? Five years? Ten?

Demographics, globalization, technology impacts, population movements, cultural shifts, economic changes…we are all in a moment of substantial shift, similar to what was unleashed onto the Middle Ages by Gutenberg’s life altering printing press in the 14th Century…similar to the impact on the agrarian world with the advent of the Industrial Revolution in the late 18th Century. These are big picture shifts. Ways of living vanished and were replaced with new options, in these earlier eras.

Will Salt Spring and the Gulf Islands remain as they are? Hmmmm…..

Meantime, several local groups are meeting and creating information bases, to address the outstanding issues still facing Salt Spring, after the vote to remain “as is”. In October, at the civic election time, two trustees and a CRD director will be elected, for a four year term. Stay tuned.

The Real Estate Market?

And, what about the real estate market as we enter May? Thin inventory below 900,000, plus strong buyer demand in entry level, keeps a strong sales picture in place. Many buyers are from Vancouver and plan to live on Salt Spring. The market, up to a certain price point, could be described as a seller’s market. Perhaps half of the listings currently available, in residential offerings, are above one million Canadian dollars.

Please pop into my office for my weekly “driveby” lists…they show all available listings, regardless of realtor, company, or board affiliation.

The realtor.ca site is geographic and also shows all current listings.

The Southern Gulf Islands are a “gray area”…meaning that 3 boards are represented on them (Vancouver, Victoria, & Vancouver Island). Boards are a portal for a realtor to get their listing onto the geographic MLS.

In a “gray area”, if you go onto a realtor’s private client service, you will only see the listings on that realtor’s board…you would miss, perhaps, 50% of the actual listings. Very important, then, to take the time to view realtor.ca (for full information on “what is”).

So, low inventory, the lowest I’ve seen since 2003, few new listings, price stability, some small price increases as the few new listings do come onstream, and we are just now entering our main grid of activity (May to September)…we may see dramatic price rises by August.

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, December 2017, Salt Spring Island

December 2017, Salt Spring

So…here we are at the end of a very haphazard / fits and starts year. Many pauses along the way…..and not all of them market related.

Offshore purchase tax in Metro-Vancouver in early August 2016 did stop Salt Spring’s spring/early summer (mid-March to end of July 2016) long awaited market recovery…Vancouver sellers had become our buyers. It took time for the effects of that tax to be digested (possibly until May, 2017). The tax did affect outcomes well into 2017.

The once-every-twenty-years La NiƱa weather pattern, that delivers a taste of “real winter” to the Pacific Northwest Coast, created cold/snow/cool/rain between December 3, 2016 and May 15, 2017…effectively erasing any 2017 Spring Market. Both tourism and real estate activity were affected.

Salt Spring Island Real Estate

Salt Spring Island Real Estate

The Summer Market did not begin in late June, as usual…it took until July 15 to kick in. A six weeks later scenario for both real estate and for the farming community was in evidence this 2017 year.

During late July and early August, there were further pauses in visitor arrivals and in real estate viewings…due to the significant smoke from Interior and Washington State forest fires that affected many coastal regions.

On Salt Spring, there may have been a further hesitation in August, as people awaited the outcome of the September 9 referendum on incorporation.

Underneath this fits and starts rhythm, sales slowly continued, especially in that entry level residential category, and inventory thinned out dramatically. Undeveloped land, water access only island properties, upper tier priced residential estate style holdings, and commercial options remained quiet.

Very low inventory, coupled with renewed buyer interest in the secondary home/discretionary regions, usually precedes a serious uptick in prices. There have been sales at list price, and also many back-up offer situations, and even small bidding wars, mostly in that entry level priced residential segment, particularly in the latter half of 2017.

Projections

Projections for 2018 are for continuing low inventory and subsequent strengthening of prices.

It’s still the case, though, that one has to first discover the beauties of Salt Spring Island and the Gulf Islands…to then choose “for” a particular island…and then to seriously look at available properties. It often takes two (if not three) visits before a sale takes place. When a property sells quickly, it often means that a buyer has already visited the island and has made that key decision to buy there.

Seasonality seems to have been erased, and perhaps that’s another feature of the Internet. Property seekers now turn up year-round. If one is interested in selling, it’s important to be displayed and then to await the buyer arrival. In the main, our buyers are not local. Apparently, property seekers are on the Internet doing their searches for about two years before they will act. Patience is definitely a part of all sales transactions, for a seller, in any discretionary marketplace.

The Real Estate Services Act in B.C. will be significantly changed by March 15, 2018. Ask me about this. The cancellation of Limited Dual Agency (in place since 1995) is only one such change. These many changes are coming into place as a result of one realty company’s “shadow flipping” transgression, in 2015, in Vancouver. A new Superintendent of Real Estate, and a newly structured Real Estate Council, will be implementing the changes. Be informed.

There is always opportunity in real estate, no matter the market trend in play at any given time. Creative responses to lower inventory can be helpful to a buyer seeking that special property. Find out what will work for you.