Market Analysis

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

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.

Salt Spring Island, November 2022, Market Analysis

What about the real estate market as November begin

November…the season of craft fairs and holiday events. Standard Time returns (Fall back, remember). Shorter days/longer nights…rain, rain/sun mix, golden leaves scratching across pavement, temperatures cooling quickly.

After a 90 day warm and sunny drought, with rivers and creeks so dry the spawning salmon could not fulfill their October cycle, everyone is glad to see November rains appear.

November also brings Remembrance Day…wear your poppy, and if on Salt Spring try to be at the cenotaph for this annual community tribute. Thank you to those who served.

What about the real estate market as November begins? Several years ago, Salt Spring and the Southern Gulf Islands became a Fall Market. Although basically a seasonless marketplace, with buyers arriving throughout the year, there are high point times for sales. Fall is one of them. Late August to year end can be busy.

The Spring/Summer market was a holding pattern

2022 saw a “six weeks late” scenario. Spring was late (remember Juneuary?). The farming community noted that the growing season was six weeks later than usual. This flat-line “pause” seemed to be mirrored in real estate activity. The Spring/Summer market was a holding pattern.
Salt Spring
If 2021 was the year of consistent sales and multiple offers, 2022 has been the year of “maybe”, from a buyer perspective. (Maybe I will decide to buy a property…or maybe I’ll see how things play out. What about interest rate rises? When will there be more inventory to choose from? Will prices go down substantially? Should I act now or wait and see? What about all the chaos globally? Supply chain issues? Wars and rumours of wars? Will renewal of covid shut things down again?). Worry is the background sound of 2022. Uncertainty can create pauses in action.

 

A pause is not a correction

Mount Baker
A series of substantial price reductions took place in late Spring/early Summer, but many of these reduced properties still remained without showings or sales. The six plus week pause in activity was not about price, then. Worry, worry, worry…and worry makes a buyer just tread water. A pause is not a correction.

Lack of supply is the key to market outcomes. The low inventory in properties for sale will continue. Inward migration is also a factor. The flight from urban to rural remains a principal driver of action. Time is a component in most secondary home sales, once again. Media reporting on all markets is always reactive, not predictive. September “reports” might be reflecting June…December will give the picture of September…and so on. The bottom line: lack of supply and desire to buy.

Activity is filling in again

As buyers slowly digest the parameters of this softer marketplace, activity is filling in again. A desire to be safe, and to preserve one’s capital…these are strong reasons for a buyer interest in rural lifestyles. The authentic ability to work from home, via a robust internet, is a further stimulus to a rural decision. To be “apart”, as 2023 unfolds…with its suggestion of further upheaval…perhaps makes good sense.

Ganges

So…November. On Salt Spring and the Gulf Islands? Catch the galleries and craft fairs…special and unique opportunities to “shop local”. Dine out at our amazing and varied restaurants…local produce & talented chefs. Hike the trails around the islands on the finer Fall days. Try a restorative spa ritual. Galleries invite one to enjoy the amazing artistic talent. Remember the value of taking time…a softer season reminds us how to “see”. Maybe join a choral group…or learn line dancing (yes, they still do this). Evening classes offer new discoveries.

Seeking your special Gulf Islands property? Benefit from my knowledge (of trends and inventory) and expertise (managing broker licence). Your best interests are my motivation. I look forward to hearing from you (liread33@gmail.com).

Softer…slower…a different kind of rhythm. Salt Spring smiles its November hello.

Salt Spring Island, October 2022, Market Analysis

October is beginning with a continuing long late summer weather pattern. The beauty of this harvest season is visible everywhere on the Pacific Northwest Coast.

It’s also the civic election time in B.C. (every four years), and it seems that all communities are seeing many people running for only a few seats…many more people are wanting to be involved than there are available spaces.   Salt Spring is no exception.

Usually, civic/community elections are lackluster…it’s provincial and federal elections that capture attention. The community level is very important, as it guides the day to day lives of those who live there. Important to get out and vote. Be informed.

Support the candidate that reflects your views. Those elected will be in place for the next four years.  The Gulf Islands form of governance (Islands Trust) means each island votes for two trustees and also for a CRD director. Apathy is not a choice in 2022.

October is the Canadian Thanksgiving month…an authentic Harvest season. It’s the perfect time to be a visitor on the Gulf Islands.   The micro-climate on these islands supports vineyards, wineries, cideries, farmers markets, and the park hiking/walking trails beckon. Galleries showcase the artistic culture that creates the ambiance of the Gulf Islands.

The real estate market?   Low inventory remains a factor.   Sales do take place in all price ranges.   The frenzy market of 2021 is over, but buyer inquiries remain strong.   Uncertainties create hesitations, but action is still happening.   There are both price reductions and also new listings that come onstream with higher than expected pricings.

The key to all markets is supply and the flight from urban to rural remains a key demand motivator in deciding for a purchase of a country property.   Increased interest rates do affect first time buyers, and hesitations/pauses in action are a feature, but sales activity remains consistent in many secondary home locales.   More information on current listings and sales on Salt Spring Island, as the market evolves?   Contact me for updates.   Thank you.

Meantime: it’s October…a month for star-watching as the days shorten and crisper evenings invite us to watch our skies.   The annual Apple Festival on Salt Spring, the Thanksgiving holiday weekend, the gallery openings and receptions, the ArtSpring events, the switch to Sunday races at the Sailing Club, the Saturday and Tuesday farmers markets, the olive grove and vineyard and apple orchard harvests and creation of new wines/new ciders…this is a time of beauty and the gift of restorative Nature.
The ease of the Fall Season is with us.   Enjoy!