April 2016, Market Analysis

April 2016 – Salt Spring & The Gulf Islands

Salt Spring Island

Salt Spring Island

I always think that the Salt Spring Island & Gulf Islands marketplace falls into thirds: January to April encompasses early Spring/”real Spring”. May to September could be seen as our “main season”. October to December can still be busy with actual sales, but viewings most likely took place between April and September.

Even in the 8 year downturn (late 2008 to late 2015), the scarce viewings/sales still followed this rough “third/third/third” timeline.

Solidly in a Market Shift

We are now solidly in a market shift, with a strong upward direction. In this first “third” of the overall market, inventory has been dramatically clearing out…especially in properties below $600,000. The spread between list & sale price points has narrowed appreciably in that same price segment. Between $600,000 & $900,000, the buyer is still momentarily in control of outcomes, re pricings. Fewer action in these early weeks in the “over a million” price range.

The key is always inventory…as it clears out, leaving very few options for a buyer to choose from, prices first stabilize and then rise.

For first time in 8 years, the secondary home/recreational/discretionary markets are on “the improve” side of the equation.

Previously, many buyers on Salt Spring/Gulf Islands came from Alberta. Post-commodities “crash”, this buyer profile has disappeared (for now).

Another strong buyer profile in the past has been a U.S. purchaser. In spite of our lower dollar, we are not seeing renewed interest (yet!) out of U.S.

So, where are these early responder buyers coming from?

At the moment, they are coming out of Vancouver. The six key neighbourhoods finding out-of-country buyers are propelling those sellers to other areas…buying down & putting $$ in the bank.

Salt Spring Island

Salt Spring Island

Initially (Fall/2015), these buyers were looking in the Okanagan (Kelowna) & on the Sunshine Coast. Now, they are looking on this side of Georgia Strait (Vancouver Island, Gulf Islands (particularly Salt Spring Island), & Victoria).

Such a buyer coming to look at Salt Spring is also looking at Vancouver Island & in Victoria. Salt Spring has competition, then, for that buyer. They are ready to buy, as they have sold their homes in those 6 busy neighbourhoods in Vancouver.

Many properties on Salt Spring followed the market down. No one’s fault…it was just “the market”. Now, after that 8 year downturn, the market says: we’re on the way back up. The difference? The buyer is back.

One always has to sell a Gulf Island itself first…before one can sell a property on that Island. A secondary home/discretionary market is about choice. If someone likes a property, but doesn’t like the Island it’s located on, then they will not buy. It’s always a 2-step dance on any Gulf Island.

Salt Spring Island

Salt Spring Island

Right now, then, Salt Spring is benefitting from a return of a buyer…willing to act, & not just to look. That said, it’s important to treat these qualified (they have sold their Vancouver property) buyers with respect. They do not “have to” move to Salt Spring. Competing areas are part of the current buyer decision process.

Even in the very busy time on the Gulf Islands (2002 to 2005), sales were not automatic…one still had to “choose for” the Island before “deciding for” a property on it.

Sellers and buyers may change places on any given market trend, but both of them are a part of a successful transaction. A buyer’s market is characterized by lots of listings & few buyers…the scant number of buyers acting are in control of outcomes re prices. A seller’s market is characterized by few listings & lots of buyers. As inventory cleans out, sellers are in control of prices. However, it takes a willing seller & a willing buyer to have a successful transaction take place, regardless of market trend. In the end, there has to be “agreement”.