March 2010 | Salt Spring Island Market Analysis
It’s the Year of the Tiger, and already it has a different “feel” from either the fear market of total inaction, seen by late 2008 or the “stickyness” of the entry-level real estate recovery of most of 2009.
For a Buyer, it remains a time for action. At the moment, interest rates remain historically low. There are “alerts” out there, however, that interest rates may rise by June/July. First time buyer “encouragements” remain in place, too, for the moment. Sellers are disposed to accept reasonable offers right now, and most of the listings have seen significant price reductions, especially in the upper end property choices, over the past two year period.
No market remains static. Yes, it’s very different from the heady days between 2002 and 2005, but it’s not as dark as between 2007 and 2009. Change/shift is the hallmark of all markets. Saavy buyers are paying attention. The difference this year? It’s just beginning to emerge out of entry level or investor-rental residential segments and buyers are back viewing high end residential, undeveloped land, and commercial options. Something new! Our main window of action, in our secondary home marketplace on the Gulf Islands, falls between March Break and the Canadian Thanksgiving Weekend (early October). The new season, then, is just now “underway”.
I’ve discovered, over time, that I’m about 6 to 8 months “ahead of the pack”. Last August/September, I thought we would see a move out of cash and into solid hard asset investments, as a way to simply preserve capital. Although the deflationary argument still seemed to be in force, the growing concern was that inflation could not be held at bay. So much cash being printed, globally, without backing, did not portend anything “good”, economically.
In January, I attended an equity investment major conference, and was very interested in the speakers, who were from all over the world, & who were recommending that investors have 30% of their portfolios in gold, precious metals, and rare earths. That’s a very “heavy” weighting in favour of commodities, which are, of course a hard asset vehicle.
I also keep an eye on the Fine Art Market, as I do think there’s a connection between art sales and secondary home/discretionary area purchases. When Christies Fine Art Auction took place in February, a Giacometti sculpture sold for much higher than projected, and it went to a private buyer. Hmmm…perhaps, now, we will see that move out of cash and into protected hard asset investments.
For Salt Spring Island, and the Gulf Islands, that Provincial Government body, the Islands Trust, controls growth on the Islands through strict zoning/density bylaws, that have been in place since 1974. The Trust’s mandate of “to preserve & protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents”, ensures a low inventory of properties for sale, at any given time, regardless of market trend in play.
A cap on growth means limited inventory. Over time, as this area of the world continues to be discovered (& the Internet has erased time and geography remember), a lack of inventory coupled with a strong buyer desire will result in appreciation of the asset. It’s simple economics…the Islands Trust is the reason for this escalation potential in values.
One of the results of the recent Olympic Games, in Vancouver and in Whistler, was the discovery of this exceptional area by the world. The entire “sea to sky” envelope of the Coast, a thin ribbon of developable land, between the sea and the coastal mountains, is limited, if not topographically, then by municipal zoning rules or by government preserve options such as the Islands Trust.
The entire area enjoys varying microclimates that allow for vineyards, olive groves, orchards, a foodies paradise. There is something exceptional about the entire coastal grid, as I call it, although, for me, the Southern Gulf Islands, and Salt Spring Island in particular (the one with the year round lifestyle/all amenities and services in place, on Island), is the space I’m glad to call “home”.
Beauty, a pristine quality, proximity to ski hills and to the sea’s sailing opportunities, all in the same day, the cosmopolitan nature of Vancouver, the smaller town allure of Victoria and Vancouver Island communities, plus the “sunshine coast” venue, and all of the Gulf Islands…close and yet apart. The 21st Century and yet the allure of a yesteryear pace, if wished. Great climate, in the heart of the best protected boating waters in the world, beauty everywhere, a caring population, a stable economic and cultural and infrastructure country…it doesn’t get any better!
Whether they were here in person, for the Winter Games, or whether they watched on t.v. or via the Web, I think this came through to the entire globe. We have been discovered, and I think we will see the spinoff effect of the recent Games within 3 to 5 months. I’m so glad that I decided to do that 7 foot kiosk/DVD promotion in Whistler, in a very high visibility area…this will be “up” for the remainder of the year, and brings knowledge of this area, and of all my listings, to interested buyers. Did you know it’s only a 30 minute floatplane flight from Alta Lake, close to Whistler Village, to Ganges Harbour on Salt Spring? Hmmmm……
Meantime, I encourage everyone to keep practicing their periphery vision skills. Tunnel vision keeps us locked into predictable channels. Periphery vision catches the whispers at the edge of things, which are really the arrow into the 21st Century.
Nothing has been untouched by the internet, and it is now real estate’s turn, as an industry, to rapidly evolve into a different model. Think of the car industry, the travel industry, the equity investment industry…none of these are the same as they were 3 to 5 years ago. Now, it’s real estate’s turn. The internet brought about a consumer-centric model of business, and this is a profound shift, indeed. Call me, if you have any questions on this.
I am the Managing Broker, of the Sea to Sky Premier Properties group. Their head office is in Whistler, and they have branch offices in Squamish, Pemberton, West Vancouver, White Rock, Victoria, as well as here, on the Gulf Islands. They are an affiliate of Christies Great Estates, which is a true international exposure opportunity.
Although the main company is also affiliated with the Luxury Real Estate group, I am a part of that, too, since 1996, as an individual realtor. This allows me to place all my listings on their major global website…although other realtors, at companies with the permission to use the Luxury Real Estate logo, do so in their ads, this does not mean that they are actively involved in that group. The use of a logo does not mean that they have access, as individual realtors, to this important system — it only means their company can be involved, allow their agents to use the logo. I do have active and individual membership in the actual Luxury Real Estate affiliation; for me, it’s not just a logo advertising medium. Again, call me, re any questions on this.
I am also very pleased to be a Regent for the Luxury Real Estate group, for Salt Spring Island and the Southern Gulf Islands area. As such, I am able to offer my expertise to a group of global real estate companies, integral in their fields. These connections offer a huge benefit to my listing clientele, and bring attention to us, from a global audience.
Our world is undergoing a huge shift, in all dimensions, and it is so essential to remain positive in our response to change. It can be a little scary sometimes. We can feel a lot like Alice Through the Looking Glass, where she had to run very fast just to remain still….in change, though, lies opportunity. The consumer-centric business model now in play means that any one of us, from anywhere in the world, can create the “new”, can forge the path that knits together all these separatenesses of change. Now, there’s a challenge and a positive aspect that the Year of the Tiger can deliver to us!
At the moment, in our early Spring market, it appears to be a continuation of 2009…most of the action is still in the entry-level category, residentially. It will take until May, I think, for some sales to provide statistics to show that we are slowly upticking in price point and in property type. People are back viewing.
The first step is always the choice of area: Salt Spring? Another Gulf Island? Maybe a Vancouver Island community? The second visit, after they have “chosen for” a particular Island, is about property viewings. It still takes three visits, with time lags between visits, as the buyer is not “local”, before a deal is done. Sound familiar? It’s just the rhythm of sales, in a secondary home/discretionary marketplace.
The good news is that it’s very active, and we do appear to be at the beginning of a new market rhythm. Call, anytime, for further information on both listings and sales to date. Am always quickly available.
How may I help you to discover your Salt Spring Island or Southern Gulf Island or Southern Vancouver Island property? Look forward to your call!