Tag Archives: recovery

Market Analysis, November 2017, Salt Spring Island

November 2017, Salt Spring

Salt Spring Island, November, 2017, Salt Spring

Salt Spring Island

There’s a total of 170 listed properties (November 2017, Salt Spring) at this moment (counting only residential of all types & undeveloped residentially zoned land of all types…not including commercial or industrial zoned listings).

In a “slow/downturn” market, there can be between 380 to 420 listings (residential and undeveloped lots/acreages).

The listing inventory, since mid-March 2016 to current date, has thinned out. Mid-March 2016 was the very first sign of a small recovery on Salt Spring, after the long 8 year downturn.

It was a very slow sales volume increase, however, between then & now, with several non-market driven “pauses”.

The 15% offshore tax in early August, 2016, for metro-Vancouver, for example, also completely stopped the secondary home regions recovery…those Vancouver sellers had become the buyers on Sunshine Coast, on Vancouver Island, and on Salt Spring Island. On Salt Spring, Aug/Sept/Oct, of 2016, were “lost”.

Then: “real winter” (between Dec 3 & May 15) struck: all over the Coast. Both tourism & real estate viewings on Salt Spring were dramatically slowed.

Almost a 9 month pause, then, between August 2016 & May 2017.

The Summer Market was 6 weeks late…it usually starts in last week of June, & did not kick in until July 15, 2017. There were pauses within the summer season, as well…due to smoke from both Interior & Washington State fires…again, affected the whole Coast, but also caused significant delays in Salt Spring activity.

That 6 weeks later scenario seemed to carry into the Fall Market, too. Perhaps October was really September!

August 2017 may also have seen a hesitation in activity due to the incorporation vote on Sept 9th…several people, on either side of the question, were waiting for the vote outcome. There was a lot of off island media coverage leading up to the vote. It may have caused a bit of a “digestion” pause throughout September. Difficult to track these kinds of hesitations.

All these fits and starts sales rhythms aside, the main sales on Salt Spring Island remain below 850,000.

November 2017, Salt Spring

To date, the sales are as follows, from January 1, 2017 to October 31, 2017:

  • 21 sales between 95,000 & 199,500.
  • 25 sales between 200,000 & 299,000.
  • 31 sales between 305,000 & 396,000.
  • 43 sales between 400,000 & 489,000.
  • 30 sales between 500,000 & 599,000.
  • 20 sales between 605,000 & 690,000.
  • 16 sales between 700,000 & 795,000.
  • 12 sales between 800,000 & 899,000.
  • 6 sales between 900,000 & 950,000.
  • 25 sales between Private Island Estate.
  • 4 sales between 2.2 and 2.5.

The sales between one & two million were either waterfronts (both ocean & lake) houses, or very large farms (20 to 104 acres), or large ocean view acreages/houses. The majority of them were waterfronts.

The sales over two million were waterfronts (3 ocean & one lake), with houses.

These sale price ranges in November 2017, Salt Spring, do not include price reductions…they are the completed sale price points. In some cases, in the over a million category, there were substantial reductions at the point of a sale.

What is the main buyer profile around Salt Spring Island?

The main buyer profile is still out of Vancouver/Lower Mainland. Alberta & U.S. (used to be 50% of our buyers) are still not in evidence. A smattering appear from Ontario, U.K., Europe…but they do not always focus on Salt Spring as a final destination choice. Most Vancouver buyers are seeking to buy down, if they have achieved a good sale price at their end.

It takes time to sell any property in all the secondary home markets, and this is true of Salt Spring, too. The first step is to choose “for” the Island…and then to choose for a property. It usually takes 2 visits (often 3), before a buyer acts on a specific property.

A showings pattern is about the buyer…not about sellers, or properties, or realtors. It just takes the time it takes. Time is a very significant element in every secondary home market transaction.

Properties still remain on the market here for lengthy timeframes, before capturing a sale. Price can sometimes be an allure factor…though not always.

So…here we are…in the closing weeks of a calendar year. Low inventory in all property types and prices. Sellers often achieving list price or close to it. Back up offers in place, if not small bidding wars. A sense that 2018 will see the beginning of serious price escalation, based on that thin inventory/buyer demand scenario.

Hmmm…it does appear that in November 2017, Salt Spring and the Southern Gulf Islands have returned to the buoyant times between 2002 and 2005. A nine year downturn now being followed by a nine year uptick? Stay tuned.

Market Analysis, October 2017, Salt Spring Island

October, 2017

October is often seen as the divide between early Fall (with echoes of September charms) and late Fall (another word for early Winter, on the Pacific Northwest Coast).

On Salt Spring, the harvest season is with us: Apple Fest, Canadian Thanksgiving, Sip and Savour, Tuesday Farmers Market, Saturday Market-in-the-Park…plus the rediscovery of the softer season on this delectable Island.

Sunday afternoon sailing races, hiking/walking trails (Ruckle Park, Mt Maxwell, Mt Erskine, Burgoyne Bay Park, Channel Ridge trails), studio tours, craft fairs…these are all a part of the Fall Season on special Salt Spring Island.

Real estate discoveries and sales are a strong feature…the Fall Market can be one of the busiest of the year.

As we arrive at the beginning of October, we are noting a thin inventory of properties for sale, no matter the type or price point.

This does not mean the listings will all rush towards a buyer.

Secondary Home Markets

Salt Spring and the Gulf Islands are secondary home markets. This means they are “by choice”/discretionary regions. No one “has to” move to Salt Spring Island…or any Gulf Island.

The first visit from the mainly non-local buyer is always about the island itself…that first visit is about deciding if Salt Spring itself offers the buyer’s desired lifestyle option. If it does…then there will be a second visit to seriously look at available listings.

Often, it takes three visits before there is an offer. In a secondary home area, it simply takes the time it takes, to achieve a sale moment. Days on Market is not a relevant thing in any discretionary marketplace.

Buyers set prices and markets…not sellers or realtors.

If a buyer is not interested in achieving a property in a secondary home market, then it’s a flat sales picture.

The economic downturn (October 2008 to mid-March 2016, in our region) saw serious price reductions, few sales, and a slow recovery.

Interruptions by government (an offshore purchase tax in metro-Vancouver (where our main buyers were from) in August, 2016) and weather vagaries (a once-every-20-years La Niña “real winter”, that lasted from Dec 3, 2016 to May 15, 2017) conspired to hold up the general market recovery…there was a nine month pause in activity.

The Summer market was about six weeks late in arriving…took till July 15/16 to kick in. So…here we are…rushing into the shorter Fall Season.

In spite of hesitations, the inventory is historically small. Buyers are around. Yes, they are looking in many coastal communities…Salt Spring and the Gulf Islands have competition now, in decisions. Yes, one does have to sell the island first, before any buyer will look at listings. It remains the 2-step dance it’s always been: first, “decide for” the particular Island. Then: choose the property.

All that said, the combination of low inventory and price stabilization forecasts a market uptick in pricings. This may be with us by the early Spring 2018 market.

Add that to the Islands Trust cap on growth (the outcome of those 1974 bylaws/zoning restrictions), and the temperate “cool Mediterranean” micro-climate that encourages small holdings farming, plus the sense of safety and “apartness”, yet proximity to major centres…and one can see why there is an allure to the Salt Spring Island lifestyle.

More information? Call me. There is always opportunity for a buyer, regardless of market trends. A seller? It’s your moment. Still takes patience, though, while the buyer “considers”.

Market Analysis, August 2017, Salt Spring Island

Market Analysis, August 2017, Salt Spring Island

We are…at the mid-point of our summer season.

An interesting picture of our market, in past several months…up & down, down & up. Lots of pauses en route to steadier outcomes. A definite sales volume increase.

On March 16, 2016, we experienced the beginning of a market recovery, after the almost eight year economic downturn. It was propelled by those people who had sold in Vancouver’s “hot market”.

Between mid-March 2016 and end of June 2016, we saw steady sales, mainly in entry level residential options. At the beginning of the recovery, sellers reduced to meet buyer expectation. Slowly, sales began to favour the seller, and that large spread between list and sale pricings narrowed dramatically.

By the end of July, 2016, along with this subtle beginning of a seller’s market, we began to see a developing interest in higher priced residential opportunities. Waterfront estate properties began to receive offers, in June and July.

Then: the provincial government brought in the 15% offshore tax in metro-Vancouver, in early August 2016, to cool Vancouver’s “hot” real estate market.

The tax did immediately crash Vancouver’s market.

It also stopped the secondary home market recovery…including on Salt Spring. We lost August/September/most of October in 2016. These months are usually very active in real estate sales on Salt Spring.

Then, on December 3rd, “real winter” set in all over the coast…including on Salt Spring. This once every 20 years La Niña weather pattern lasted until May 15, 2017. (Between October 1 and April 30, records going back 122 years, for cool temperatures and significant precipitation, were broken, on the entire Pacific Northwest Coast. For first time in my career, I would say that weather affected winter’s real estate outcomes).

Vancouver tax…plus long and unusual winter…no Spring market in 2017…it added up to almost eight months of “pause”. It appears that July 6/7 began the “season”, for this 2017 year. Short and intense outcomes perhaps?

In spite of the long pauses and haphazard connections, a steady attrition in listings had continued between 2016 and 2017.

The signs of an improving market: low inventory, higher buyer demand, the beginning of sales of undeveloped land.

The result of low supply and high buyer interest can be significant price increases. It may be that we will see such increases by Spring 2018.

At the moment, as we enter our main grid of action (mid-July to mid-October), we are seeing some small bidding wars, for unique properties, plus full-price offers, plus back-up offer situations. Sales of raw land lots/acreages are well underway.

Sellers are now in control of the improving trend, in the transaction moment. Buyers need to make their highest and best offer when considering a purchase. An improving trend means less latitude for a buyer to negotiate. More information? Call me.

Salt Spring in the Summer is a very pleasing experience. The Saturday Market in the Park, the Tuesday Farmers Market, the artistic offerings at ArtCraft in Mahon Hall, the events and gallery displays at ArtSpring, studio tours throughout the Island (pick up the map at the Visitor’s Centre), the Ganges Village galleries, the farm stands with organic produce, the hiking/walking trails to encourage the experience of the natural world, the kayaking and sailing opportunities in this part of the Salish Sea…the vineyard tastings, cidery, craft brewery, cheese-makers…superb restaurants creating great menus with local fare…ocean and lake delights…it’s called summer-summer, and is there to enjoy!

Market Analysis, July 2017, Salt Spring Island

July 2017

July begins our main season…both for tourism/visitor experiences and for real estate discoveries and sales.

In a way, Salt Spring Island is seasonless. People turn up at any time, and real estate sales occur in December and January as well as in August and September.

Salt Spring Island

Salt Spring Island

The Pacific Northwest Coast, though, does seem to call forth most activity and arrivals in the late summer/early fall time. Although gardens spill over into spring beauty in April/May/early June, the arrivals time for serious property seekers has evolved into that mid-July to end of October timeline.

Since mid-March, 2016, and even with interruptions from city off-shore tax ramifications and results of “real winter” (added up to 7 months of “pause”), we began to recover from that 8 year global economic downturn…and we have now arrived at an authentic seller’s market.

The classic definition of a seller’s market: low inventory plus high buyer demand. The outcome of a seller’s market: price increases.

That said, there are always opportunities for a buyer.

To own property on a Gulf Island, including on Salt Spring Island, is a long-term and enviable asset.

In 1974, the provincial government created the Islands Trust. It’s mandate: to preserve & protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. Through strict zoning/bylaws, the Trust effectively capped growth.

A limited inventory, both structurally and by market forces, does predict an escalation of prices, over time.

These early days of recovery in the real estate sector have seen most of the sales activity in the entry level priced properties. It may be that this action will now start to be seen in the mid-range to the upper tier priced options. What is also interesting, at this point: undeveloped land options have also seen sales action. A market recovery does always begin with sales in the entry level residential segment. As inventory thins, land options and a building project are considered.

July and August are key months for all businesses in our rural/recreational region…tourism is the main industry in the Gulf Islands. A successful visitor experience can result in a real estate sale.

Looking to sell? This may be an optimum time to consider listing your property. Low inventory coupled with buyer demand does favour a seller. Prices have stabilized. In many cases, properties are selling at list prices. In a few instances, if a property is unique and there are no comparables, there are small bidding wars. There are often back-up offers, due to lack of supply. That said, the buyers are, in the main, not “local”. They are looking in other coastal communities, too. Salt Spring has competition as a destination for a buyer. All sellers need to treat offers with respect. The Gulf Islands are discretionary/”by choice” areas.

Seeking to buy? A creative approach can often keep a property purchase at budget. It’s important, though, in an offer moment, that one puts in one’s “highest & best” offer response. A seller’s market means that the negotiating window that buyers enjoyed, two years ago, has been erased. There is competition from other buyers now. More information, on how to enjoy a successful property purchase, as a buyer? Call me!

There is always opportunity, regardless of a market trend in play at any specific time.

Market Analysis, March 2017, Salt Spring Island

March 2017

So…the season begins….traditionally, March Break to Canadian Thanksgiving Weekend (mid-March to mid-October) offers the traditional grid of real estate sales action in the coastal secondary home (recreational) markets…which includes Salt Spring.

Salt Spring is basically a seasonless market, though, and people visit year round…real estate sales can occur at any time.

If one is seriously for sale, then one needs to “be exposed to the market”. The digital world, which is now where most buyers first encounter a listing, does not recognize weather or time of year. If wanting to sell, it’s important to be found on a buyer search, at any time.

For a buyer, statistics show that they look for property almost 2 years before buying, via Internet sites. Yes, they are “interested”, but not yet “ready”.

About 6 weeks before they are in that “ready” state, they connect with a realtor and make appointments to view what has caught their attention. Once they physically arrive and view, they will see other options, too. Thus, the buyer may or may not purchase the property that first caught their attention.

Hmmm…in secondary home markets, where most buyers are from elsewhere, it often takes two (and sometimes three) visits before a purchase. Since these buyers are often from afar, there can be substantial timelines between visits…sometimes 3 to 4 months, or longer.

Time lags are a part of real estate sales in secondary home/discretionary markets. Days on market are not significant in recreational/by choice regions. Sellers know how long they’ve been listed, but to a buyer who has just started a search, everything is “new”. If a newly listed property sells quickly, it often means that a buyer has turned up for that second or third visit, right at the time the listing came onstream.

So many changes to the real estate industry, all of them driven by technological shifts, but some things remain the same…especially in the recreational/discretionary regions.

Customer service, knowledge of the area (both inventory and market trends), negotiating skills, an authentic interest in a consumer’s concerns, knowledge of zoning/bylaw issues (very important on a Gulf Island, which is governed by the Islands Trust), a good short-list of qualified professionals to aid the consumer (property inspectors, legal advisors, septic installers, water test labs, architects, contractors, mortgage advisors, etc)…a local realtor understands the area and can interpret the many local issues.

An Internet search is helpful, but some items in a recreational region are best discussed with a knowledgable & experienced local realtor. That interpreter function is an essential addition to any internet based information.

Market trends: like any market, real estate also experiences that wave-like model…up and down and somewhere in between. Markets are never static.

The global downturn of late 2008 lasted for almost 8 years in our local region…some areas saw recovery much earlier. For Salt Spring and the Southern Gulf Islands, the recovery began in mid-March, 2016. There were earlier whispers of action in late 2015, but a marked upsurge in residential sales volume began in early Spring, 2016. By year’s end, inventory had thinned out and prices had stabilized.

A seller’s market is characterized as low inventory coupled with high buyer demand. This scenario can lead to price escalation.

This early in the season, it’s too soon to speculate on price points. All that can be said is that there might only be two or three property options currently on the market that will suit a buyer. Thus, the seller may benefit by achieving list price or close to it. If this lack of inventory trend continues, then price escalation may be a factor by the Fall Market.

There is always opportunity for a buyer, regardless of market trend in play. Creative ways to buy that special property, in a recreational area, can always be found…even in a seller’s market.

Market Analysis, August 2016, Salt Spring Island

Summer on the great Pacific Northwest Coast is a superb season…and the micro-climate enjoyed by Salt Spring Island and the Southern Gulf Islands is delectable.

Salt Spring Island

Salt Spring Island

It’s a short season…and here we are at a mid-point. Time to get out there and enjoy all of the amazing opportunities offered in our special Islands region.

A time for Inspiration

Lakefront swimming, ocean kayaking, sailing between alluring anchorages, savouring produce from farm gate stands, being inspired by artists and crafts artisans in galleries and on studio tours, enjoying live music venues, theatre productions, and a hiking/walking experience that re-introduces one to the natural world preserved on the Gulf Islands.

The real estate market has recovered on the Gulf Islands in what I call the residential entry-level property segment. On Salt Spring, that would be 350,000 to 750,000 price range.

It does appear that the Spring market in the Gulf Islands is about sales in that entry level residential category.

Between mid-July and end of November, upper tier priced residential properties begin to find their buyers.

Some years back (and who knows why), the Gulf Islands became a late summer/fall real estate marketplace.

This market analysis is always written at the beginning of a month. For market updates, reflecting the rest of the month’s outcomes, check out my blog. Also check back to my June and July “reports”…this is a very new recovery (just 10 weeks old? After an 8 year downturn.).

So, the first half of the year saw the following breakdown of sales (January first to July 18th):

  • 19 sales up to 200,000.
  • 26 sales between 200 and 300,000
  • 40 sales between 300 and 400,000
  • 43 sales between 400 and 500,000
  • 37 sales between 500 and 600,000
  • 24 sales between 600 and 700,000
  • 9 sales between 700 and 800,000
  • 5 sales between 800 and 900,000
  • 5 sales between 900 and one million
  • 12 sales between 1 and 2 million. (most below 1.7)
  • 1 sale between 2 and 3 million
  • 1 sale between 3 and 4 million

You can see, then, that the Spring market is about the beginning stirrings of the authentic recovery. From mid-July to end of November it’s the upper tier time.

An outcome of thinning inventory is price increase…for the moment, a buyer may have to meet the benchmark set by the seller, as listings diminish. Sales volume may have tripled, and prices may have stabilized…but price increases have not yet been strongly evident. As we ease into the Fall market, we may start to see prices escalate.

Why Should you Purchase on Salt Spring>

Why consider a purchase on Salt Spring Island or a Gulf Island? One thought: the Islands Trust (created in 1974) effectively capped growth on the Gulf Islands. A limited inventory, combined with a strong buyer demand, creates a higher price point for all purchases. It’s the economic axiom that low supply plus high demand equals price escalation. A property purchase on a Gulf Island is perhaps a protected investment.

Perhaps a more important reason for a Salt Spring Island or Gulf Islands purchase: to enjoy a softer, gentler lifestyle, with an emphasis on the natural world and the impact of an artists voice.

Salt Spring and the Southern Gulf Islands are an easy commute to Vancouver, to Victoria, and to Seattle. Whether by ferry (3 different regular scheduled ferries service Salt Spring) or by floatplane (regular sked flights to downtown Vancouver, to Vancouver Airport, from Salt Spring), it’s very easy to come and to go…and yet these Island gems swim enticingly apart in the Salish Sea.

Proximity to major centres, yet serenely apart. All opportunities in the 21st Century available, yet an alluring yesteryear ambiance. A thoughtful and caring community, yet strong opinions. Definitely an interesting place to reside!