Tag Archives: Spring Market

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.

November 2014, Market Analysis

Seasonal Adjustments?

Late Fall is usually the beginning of the “softer season” on Salt Spring & the Gulf Islands & on Vancouver Island. Although our Winter weather is more like a long late Fall or a prolonged early Spring, it is still considered our “off season”. This year, the so-called off season remains busy. Hmmm….

Salt Spring Island

Salt Spring Island

Tourism drives real estate sales in secondary home/recreational markets, & then all other businesses experience good outcomes. The engine of those positive results is a stellar visitor experience, & the downturn in tourism between 2009 & 2012 did affect real estate outcomes in all coastal discretionary regions.

Slowly, since late summer of 2013, a slow resurgence in visitor arrivals began. Most businesses on Salt Spring, in summer/early Fall, this 2014 year, did see their “season” as the best since 2007. This local business outcome is a clear signal of an improving trend for real estate sales in all recreational areas.

Entry Level Residential Patterns

The pattern of entry level residential sales, that began in Fall 2013, has continued throughout 2014. Inventory in this property segment is thinning. Sales volume has increased substantially. List prices are slowly stabilizing, in that entry level category. The viewing price point considered by the buyer for same is also rising…from a search between 300,000 & 500,000 to one that would include properties up to 700,000. All good news for a strengthening market.

There has been a small increase, this year, in residential sales between 1 & 1.8 million. Some of these are step-in ready newer homes on large view acreages. A few are older homes on pleasing waterfront parcels, able to be enjoyed as summer places for now, & ready to develop as permanent homes later.

Although many of these options had been listed between 2 & 6 years, & had come down significantly in list prices before selling, their eventual sales do point to a renewal of interest in the higher end opportunities…a sign of an authentic recovery for a secondary home marketplace. Yes, offers are lower than sellers might have hoped for, but the fact of interest is a market dynamic that predicts change…& on an uptick momentum.

Salt Spring Island

Salt Spring Island

Sign of Recovery: Undeveloped Land Sales

Another sign of a recovery: the slow increase in undeveloped land sales. When a buyer will purchase a lot or acreage, in a “by choice” region, to either “hold” or to develop, it shows a growing confidence in the overall economy…& a recognition of where the best deals might be found. Secondary home markets may have seen a 45% drop in value since 2008’s meltdowns. An investor-buyer recognizes this is a premier moment to act in such markets.

In spite of lateness in the year, the property viewings & subsequent sales continue on Salt Spring, on the Gulf Islands, & on Vancouver Island. Yes, the bulk of such sales are still in that entry level residential category, but prices of same are rising.

Our usual Pacific Northwest Coast “season” (May to October) seems to have shifted this year to an August beginning…& it is still continuing.

2014 may be recognized as the true transition year between a severe & prolonged downmarket and a serious hard asset uptick. If so, then our Spring Market (in play by March Break) in 2015 may show higher prices & less inventory.

Recently, tax assessed values were being relied upon by buyers as market value indicators. This may be another area of upcoming change. Previously, in all secondary home regions, market value was always much higher than government tax assessments. This recent timeline in favour of buyers may be slow-dancing to the seller side of the transaction equation. February 2015 should tell the tale.

Change in The Buyer Profile?

One serious change post-downturn (which may have been in place since 2006, in all secondary home/discretionary regions): the buyer profile. Pre-2008 economic meltdowns, that “boomer” demographic was a strong buyer profile on Salt Spring & the Gulf Islands, & on Vancouver Island. An aging population in this segment may lead to a reliance on “millenials”…& their property decisions may be very different from those earlier boomer desires.

Will secondary home marketplaces be as popular? Hmmm…that might be the big unknown, for all discretionary/recreational communities. Changing tastes mean changing visitor outcomes…which directly affect real estate sales in all “by choice” regions. Hmmm, indeed!

Many positive signs, then, as we ease to the final weeks of 2014. Continuing entry level sales activity, growing interest in undeveloped land, a slow renewal of sales in the million plus range, a recognition of excellent values in secondary home markets…plus a renewed safe haven seeking.

All indicators point to better days for tourism & real estate sales in all coastal discretionary areas. The recovery is not even-handed, but it is underway.