Market Analysis

Salt Spring Island real estate in depth monthly analysis by Sea to Sky Properties’ broker, Li Read

Salt Spring Island, May 2023, Market Analysis

May, 2023.

Beautiful May.

The great Pacific Northwest Coast

Salt Spring Island

The great Pacific Northwest Coast, including the delectable Southern Gulf Islands/Salt Spring Island, enjoy this month of natural largesse…blossoms tumble through orchards, and gardens flower forward. Lucky us to be here, whether this is home or just visiting.

What about the local real estate market at this very beginning of May, the month that has Spring easing into Summer? This past April continued to show low inventory and significant buyer interest, in options below 1.5 million. The higher priced properties began to get renewed inquiries, but fewer sale outcomes. May usually traditionally begins the sales of upper tier priced opportunities. Low inventory continues as we start into May.

Supply & Demand on Salt Spring Island

Both Canada and local community markets are aware of the continuing lack of housing…at the same time that the federal government is encouraging strong immigration (1.5 million by 2025). Lack of supply and increased demand promise price stability and also seem to encourage price increases.

Most buyers locally continue to be from Vancouver, and the desire to mo

ve from urban to rural remains a strong motivator. Smatterings of buyers from Alberta and Ontario are also present…retirees? Interest from out of country is there, but the federal two year ban on foreign ownership has created misunderstandings. There are many exemptions. One exemption: the ban does not apply to recreational regions and so Salt Spring and the Gulf Islands would be exempt. Important for out of country buyers to check into this.

Not Only A Change In The Weather

BC Ferry

The many societal shifts propelled by covid shut-downs continue to unroll. Working from home is a major change.The authentic ability of the internet to support this allows this significant work change. Will empty office spaces and commercial buildings now be revamped into needed residential housing? Creative designers are needed! On Salt Spring, for example, the vacant upper level office spaces in Ganges Village could be reconfigured into living opportunities.

Real estate has always been both global and local, as far as trends go. Population movements historically change the status quo in all countries. Throughout the world, population movement is underway…the seeking of better lives. All countries thus shift socially in response to massive migrations.

Salt Spring and the Gulf Islands remain unincorporated areas, with a governance format that comes under the Islands Trust and the CRD (Capital Regional District). The post-covid changes were perhaps unforeseen, but the huge impact of artificial intelligence is another significant game-changer…Will the 1974 Trust documents survive unaltered? Hmmm…. Early May may be about more than local real estate outcomes.

The Summer Winds

So, we start into the natural allure of May with continuing low inventory choices for buyers and with a desired lifestyle attracting them…a property on Salt Spring and the Gulf Islands shimmers invitingly. Prices remain relatively stable. Will they rise? Too soon to say…couple huge inward migration with lack of housing options and it would appear upward pricing will continue. It may take until September to chart this. Summer sales need to take place first.

Beautiful May

So…beautiful May. Mother’s Day and the Victoria Day Holiday Weekend are mainstays of this lovely month. Beaches to walk on, sailing and kayak adventures to enjoy, hiking trails that beckon, outdoor patios to allure at our amazing restaurants, wine and cidery tastings, Saturday Market in the Park, Tuesday Farmers Market, farmgate stands, art openings at the Ganges Galleries, ArtSpring events, studio tours, meditation and spa renewals, ArtCraft…wow…feed the mind, the body, and the soul on the dazzling Gulf Islands.

Look forward to meeting you and to helping you with your real estate needs on Salt Spring and the Gulf Islands. Thank you.
(liread33@gmail.com).

Salt Spring Island, April 2023, Market Analysis

Unique Real Estate in Unique Areas

The very beginning of April is with us. T.S. Eliot poetically stated that “April is the cruelest month”. Perhaps he meant that the month begins with the face of March still in place (aberrant weather events) and ends with the wondrous and fully flowered May promise.

What about the real estate market on Salt Spring and the Gulf Islands at this very beginning of April?

All coastal markets are noting that low inventory is continuing.

In the main, locally, many owners are choosing to hold what they see as a good investment…a property on a Gulf Island. The Islands Trust form of governance (put in place in 1974, by the provincial government, to “preserve and protect the environmental beauties of the Gulf Islands, for all B.C. residents”) effectively capped growth through strict zoning/bylaws controls. Regardless of market trend, there is always a low inventory on a Gulf Island. An investment security net?

Occasionally, an aging owner might consider moving…but low inventory is an issue everywhere and they can’t find an option in that area they would consider moving to. They don’t want to be houseless and so do not list.

Global Events

The federal government is seeking strong immigration between 2023 and 2025…up to 1.5 million new arrivals. This policy is happening at the same time as continuing low inventory for either purchase or rent, across the country. For decades, lack of housing has not been addressed. A recipe for price stability and price escalation?

There are many events, often of a global nature, and so beyond individual control, that could be described as “worrying”. Wars & rumours of wars, supply chain issues, insecurity of interest rate rises, currency concerns, stock market fluctuations, a fear that banks will fail, shifting job markets…what to count on? Chaos is a factor.

Post-pandemic, the entire work environment has changed. The ability to work from home, as the internet finally authentically made this possible, has put rural and urban living on the same footing. This may be a driver to action as buyers sell their urban lifestyles and choose rural. A kinder, gentler experience?

In a time of extraordinary change, it’s ever more important to focus on our periphery vision and not to follow the narrow channels prepared for us. Understanding the societal effect of a robust artificial intelligence might be worth a look. Back up a bit, see what flickers on the edges of our visual sphere and pay attention to that…it’s where creativity lives…and any one of us can create the new. Are you looking?

The Preservation Cap?

So, at the very beginning of April, there are not a lot of real estate choices for a buyer in any property type or price point.

Plus: A call from the federal government for significant inward migration.

A desire from a buyer to live in smaller areas that offer a pleasing lifestyle. The fulfillment of the long-standing government “preservation” cap on growth on Gulf Islands. The allure of real estate as a good hard asset investment to preserve capital. The messages seem to suggest that unique real estate in unique areas will continue to be a stalwart investment choice.

April. A good time to immerse into Nature. The annual promise of renewal…Spring’s gift. Important to “see”. Maybe even to look back at another era of extreme change and societal upheaval: the Industrial Revolution of the 19th Century. Time to reconnect with the Romantic movement in literature and music? Their emphasis on the inspirational natural world might work in our era, too?

Things To Do on Salt Spring this Spring

On Salt Spring? Catch the annual Spring Art Show, drop into the annual Home and Garden Show, enjoy the Spring menus at our great dining spots, renew with a healing arts moment at one of the spa opportunities, see an event at ArtSpring, picnic at a beach, explore the hiking/walking trails, kayak to Chocolate Beach…Spring says get up, spruce up, get out…open the doors and windows…breathe.

Salt Spring Island, March 2023, Market Analysis

March, 2023.

Meteorological Spring

March 1st is meteorological Spring…the calendar says it’s March 20th. This 2022/2023 winter La Niña weather pattern on Salt Spring and the Gulf Islands brought several snow and wind storms, (not our usual “cool Mediterranean” winter pattern). Now the very beginning of March says hello and smiles its daffodil promise. I’m in.

A pause is not a correction

What about that mixed message real estate pattern? In Fall 2022, there was a significant pause in activity/outcomes, although low inventory remained the theme. Buyers appeared to be digesting fearful issues such as increases in interest rates and impacts of inflationary pressures. A pause is not a correction.

In early 2023, activity began again. The same uncertainties remained: impacts of interest rate rises and inflationary pressures, worry about geopolitical issues (distant wars, supply chain inadequacies, concerns about lingering pandemic outbreaks and possible new ones, currency worries, among others)…it seemed, however, that people just wanted to get on with their lives, and so action ramped up.

The main driver to action continues to be that flight from urban to rural. The main buyer profile in the rural areas continues to be from Vancouver/Lower Mainland.

Lack of Housing Remains

The lack of housing is a huge problem across Canada, and also impacts the entire province. Federally, the government is seeking to attract 500,000 immigrants a year, starting this year. Lack of housing to buy or to rent will continue to keep prices stable in all regions…and possibly lead to renewed price increases, especially in desired areas.

On Salt Spring, at this very beginning of March, there are very few single family homes listed for sale, and those residential offerings under one million tend to be strata properties (mainly townhomes) or small recreational cottages or serious fixer-uppers. Even properties over a million may need renovations…there are very few step-in ready opportunities available at this moment.

Self Reliance vs Assistance

Interest in farm-style options continues…a desire to be self-sufficient (yes, that’s our friend the “back to the land” movement again). Boaters do ask about waterfronts with a dock…and these are quite rare now. Rare does imply stronger pricing.

There may be some listings opening up from aging retirees, who might like to return to city options, to be close to specific health requirements or to family, but they can’t move unless they can find something where they would like to move to…lack of inventory is an issue everywhere. These aging boomers do not want to be houseless, and so that lack of housing product everywhere does stop listing outcomes on the Gulf Islands.

We live in an era of profound change and part of that is to do with impacts of artificial intelligence on our everyday lives. Another: the moving off of the boomer voice and the impact of the millennial shift. It’s important to think about that when listing a home built in the 1990s, say. A lot of that era is on the Gulf Islands. Who is the buyer? What is a millennial seeking? How might one create that in a boomer-built house?

In spite of so many shifts and concerns, it’s important to remember the important things: family, friends, volunteering, keeping an eye on the future (no need to fear it…it’s just the evolution of what we always do…live our lives), and to work for best outcomes for our communities.

Looking to move to Salt Spring or a Gulf Island? Thinking of selling your piece of paradise? Call me. Successfully connecting buyers with sellers since 1989, I look forward to bringing my expertise, knowledge, and experience to your benefit. (liread33@gmail.com).

So…March. Time to pick up a picnic lunch and renew your experience of Ruckle Park trails and ocean vistas. Time to meet with friends for lunch or dinner with a view (Moby’s, Seaside, Auntie Pesto’s, Rock Salt, Hastings House). Time to seriously Spring Clean (it’s the windows…sparkle them up). Time to get ready for all the upcoming openings (Saturday Market, galleries showcasing new artists works, splashes of colour in gardens, the delectable coves and beaches to visit and to inspire summer plans).

March is the beginning of our Gulf Islands season. The earth flowers forward. Be there. Notice. Be inspired. Welcome.

Salt Spring Island, February 2023, Market Analysis

February…and the slow slide into Spring begins.

It’s a short month, with a romantic allure on Valentine’s Day (Feb 14th), and a weekend holiday on B.C. Family Day (Feb 20th) Weekend.

Yes, a mix of winter and early spring, with that freshening sense of new beginnings (always the welcome message of real Spring).

Early Real Estate Patterns Emerging

What about the real estate patterns that are also beginning to emerge? It often takes until mid-March to get the tone of a market in a secondary home marketplace, such as the Gulf Islands. The buyer profile on the Gulf Islands is not local…buyers arrive from elsewhere…and for the last several years (perhaps fully since 2015?), the main buyer has been from Vancouver/Lower Mainland.

After the first pandemic closures in early 2020, real estate activity began…the flight from urban to rural was the main driver to action. The ability of the internet to authentically allow the option to work from home, no matter that location, also was in place by 2020…allowing that rural shift to successfully take place.

In 2021, the inventory thinned out dramatically in all rural areas and in some cases there were bidding wars (more buyers than sellers). The low inventory continued throughout 2022, but buyers were pausing…inquiries came in, viewings would take place, but activity from buyers had slowed. Uncertainty was the culprit.

In the latter part of 2022, worries about the impact of distant wars, supply chain issues, concerns about lingering pandemic and health outcomes, fears about rising interest rates, currency concerns, reports of a global recession…all of these uncertainties had buyers simply treading water…are we safe? That seemed to be the major question. A pause is not necessarily a correction.

Lack of supply is what keeps prices stable and potentially tracking higher. The federal government is seeking immigration of 500,000 each year for the next two years. At the same time, they are putting a two year ban on foreign ownership. (There are many exemptions and one of them is that the ban will not apply to recreational areas (such as the Gulf Islands). Check the federal government website for further details).

Less Supply, More Demand…

CMHC (Canadian Mortgage and Housing) forecast last year that unless 22 million housing units were built by 2030, there would be no alleviation of the lack of supply in Canada. So: few housing units and increased immigration…sounds like a recipe for price increases, in foreseeable future. Hmmm…..

It is interesting, when looking back to previous serious recessionary times, that real estate usually softens a year before other indicators point to such outcomes. If so, that would put 2022 as the softened year in real estate. From early March to early December, 2022, the hesitation in buyer activity did see some dramatic price reductions, to try to jumpstart sales action. In most cases, these reductions did not result in either more viewings or in sales. When a buyer is treading water, it means a period of inaction. Real estate also often recovers sooner than other lagging sectors.

Unusual Active January

In early 2023 (January, often a quiet month), it became active again (working around bursts of winter weather, of course). Sales of some properties that had been listed over a year, and with reductions that had been ignored, suddenly took place. As we enter the very beginning of February, inventory remains extraordinarily low.

Owners do not want to be sellers, it appears, unless they have to. To own a property in a unique area, where the Islands Trust form of governance effectively capped growth (in 1974), may be seen as a stalwart investment…a hedge against inflation and currency pressures. Buyer choice remains limited. By April, media reporting may be highlighting this renewed buyer activity and the lack of listings. More information? Contact me (liread33@gmail.com).

A Time of New Possibilities

We are all prisoners of our time…this current time period is full of unknowns and uncertainties and this does create hesitations. It may also be a time of new possibilities. Ever more important to sharpen up our editing skills. We are all swimming in a sea of raw data…making sense of it is a task indeed.

February is a good month to read, listen to webinars and podcasts, attend investment seminars, to glean bits of wisdom to guide us, to take the information in and then to see what makes sense individually. Also important to keep up to date on AI discoveries…things like ChatGPT could be serious game changers for our era. We are now all, in a way, our own experts. Important to trust our own inner editor.

Meantime, it’s inspiring February. Early flowering shrubs, snow drops and crocus bulbs are up, early daffodils in protected areas are smiling hello. Remember to get out and about in the natural world. In our digital universe it is ever more important to really “see” our companion natural environment. Walking meditation is a lovely entry to such appreciation.

February…an invitation to softer days, lighter days, and all that an early Spring promises. Enjoy!

February…and the slow slide into Spring begins.

It’s a short month, with a romantic allure on Valentine’s Day (Feb 14th), and a weekend holiday on B.C. Family Day (Feb 20th) Weekend.

Salt Spring Island, January 2023, Market Analysis

Salt Spring Island

Resolutions

January…it starts with resolutions.

There’s something about that blank palette at this very beginning of the month, in this introduction to a new year. We want to shape ourselves up.

A new year invites change. Change offers inspiration and also brings uncertainty. A mixed bag. The beginning of January is also full of forecasts for the new year…investment suggestions are at the forefront. The key question: how to be safe?

And what about specific real estate forecasts?

For Salt Spring and the Southern Gulf Islands, it always seems that the last two months of the preceding year are similar to the first two months of the new year.

Rise of Interest Rates

Looking at late Fall, 2022, then, we noted that the listing inventory continued to be very low. Properties below a million tended to be strata options or small homes/cottages (most needing renovation or rebuild work). There were quite a few residential listings between one and two million. Sales were mainly below the million mark. A very few sales took place between 2 and 3 million. That “middle” person price category of one plus million seemed to have softened by late 2022. Was this a result of rising interest rates?
Salt Spring Island

Arriving at the beginning of the new year, we note continuing low inventory. Prices have seen downward pressure since late Fall, and this may continue in early 2023. Price reductions do not always trigger viewings or offers. If a buyer is reluctant to act, they will tread water, seeking some market clarity. Most buyers continue to be from Vancouver and the desire to drop urban and seek rural remains a propeller of action.

It’s a good idea to attend investment seminars, whether in person or by webinars/podcasts. No one really has a definitive blueprint in this time of shift, but it’s good to let information pass through us…something that speaks to us will jump out. Be listening.

I found it interesting that some major National real estate brands were surprised that very little inventory came onstream in late 2022. They had thought the interest rate rises would have led to a spill-out of listings. However, if they can, it appears that most owners are choosing not to be sellers.

Some Certainties Lie Ahead

The Canadian government is seeking 1.5 million immigrants by 2025 (that’s 500,000 new arrivals each year, starting in 2023). At the same time, the federal government is banning foreign purchases for two years…starting January 1. Mixed messaging?
Salt Spring Island

As long as supply is low, it seems to promise price stability in real estate markets. CMHC (Canadian Mortgage & Housing) noted in 2022 that 22 million dwellings would need to be in place in Canada by 2030, or the lack of housing problem would not be addressed. Hmmm….. Add in that real estate keeps pace with inflation, and may protect from currency issues, and it seems that stability in real estate, especially in unique and beautiful places, may continue.

Until March, Predictions can be in vain

The very beginning of January is too early to make any significant projections about local real estate markets. Impacts of government taxation measures, interest rate rises, lack of supply, concerns about impending recession, continuing inflationary pressures, questions about currencies…one cannot ignore these global concerns. Locally, it always takes until March Break in the Gulf Islands to see the possible tone of this new calendar year. Continuing low inventory will be key.

Meantime: it’s the beginning of January. Time to enjoy the softer season on the Gulf Islands. There are always things to see and do…and every day is that little bit lighter and longer. Meteorological Spring begins on March 1st…a hop, skip, and a jump from January 1st.

Salt Spring

So, time to hike and walk the trail systems, to do some early spring cleaning, to sort files and spiff up the office, to keep up on projections, to meander the art galleries (to inspire one’s soul), to do lunch at our great restaurants and ponder the views (important to support local), to take 5 as the great Brubeck played…and to simply be. A fallow field moment is always restorative. A time out.

It’s January. Enjoy!

Salt Spring Island, December 2022, Market Analysis

The first of December is considered meteorological Winter, although the calendar says it begins on the 20th. The great Pacific Northwest Coast experiences shorter days (dark by 4:30 p.m.) and every year is slightly different, weather-wise. This year promises snow and arctic cold. I prefer the usual rain that has our west coast location often described as “the famously wet coast”. (I am allergic to snow at sea level).

Salt Spring Island

Things To Do on Salt Spring Island This Winter

Lots of art gallery openings and receptions in December, plus the annual WinterCraft at Mahon Hall until the 23rd, the annual Beaver Point and Fulford Hall craft fairs (December 2 to 4), and other loved pop-ups…closed for two seasons due to covid closures, these displays of artistic flair are welcomed. ArtSpring offers choral/seasonal concerts…check out the website for dates. Enjoy the lights in the Village, and the decorated shops. Tasty special menus at coffee stops and restaurants…decorated farm gate stands encourage a jaunt around the island. Live music venues (Moby’s, the Legion) are fun. Check out the Christmas on Salt Spring events (the Chamber of Commerce website or Visitors Centre). Does Santa really arrive by floatplane?

Close to major centres and yet wonderfully apart…a visit to a Gulf Island/to Salt Spring Island can be a restorative and peaceful experience at this softer Winter season.

Real estate at this end of the year

Real estate at this end of the year time is still consistently chugging along. Buyers remain interested and active. Snow storms mean some delays for some viewings, but Winter does not last long in our region. Inquiries remain strong. Winter is often a weekend business in a secondary home market. The lack of inventory remains a factor. The desire for a buyer to leave the city and to live in the country is still the main reason for activity. That authentic internet connectivity allows this profound lifestyle change. A softer gentler lifestyle seems to be the goal. A very human need: to be safe.

Housing Supply & Purchase Taxation

The governments (provincial and federal) are attempting to solve the lack of affordable housing supply through taxation (offshore purchase taxation, empty home (speculation) tax, moratorium on non-Canadian buyers, interest rate rises), and yet the federal government is also looking for 1.5 million immigrants by 2025. CMHC has forecast that 22 million housing units would need to be in place by 2030, to solve this “lack of housing” crisis (not including immigration pressures).

First time buyers are affected by the series of interest rate rises. Some experts are forecasting more rate rises to come…others think not (possibly fearing societal unrest?).

Affordability is tied to supply…instead of taxing existing options, which does not grow supply, governments need to encourage construction…an entrepreneurial answer to supply and demand issues.

Real Estate – Still A solid hard asset investment

Meantime, real estate remains a solid hard asset investment (especially during currency fluctuations) and keeps pace with inflation.

December is a time to be thoughtful, a time to acknowledge traditions and to practice the art of gratitude. A time to create new traditions and to include those on their own in our celebrations. It’s fun to research other seasonal events and definitely important to have lots of candles, have a fire in the hearth, and to invite light into our homes. Maybe a year to reread Charles Dickens’ classic: A Christmas Carol?

Feasting is allowed. A pause is encouraged.

December…a time of joy. Good to partake.