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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!