May 2015, Market Analysis
“Been down so long it looks like up to me”…. The real estate song in all secondary home/discretionary markets, during the past 7 years? Perhaps.
Important when shift happens to be treading water in the current of change. No looking in the rear view mirror.
The recovery will become more even-handed
The upward shift may have begun in October last year, but slowly slowly. By February of this year, the uptick consistently strengthened in the entry level residential category.
Two years ago, the majority of sales were below 450,000. This year, sales volume may have doubled over same time period last year…and the price ceiling appears to have reached 800,000. All good news.
As inventory continues to thin out, buyers will have to offer closer to sellers expectations. Undeveloped land will begin to gain interest & buyers will consider building projects. Higher tier priced residential will get offers and begin a sales process that will match current entry level priced rhythms.
In other words, the recovery will become more even-handed in the discretionary regions. This overall improvement should be evident by late Summer/early Fall market.
The busiest March Break/Easter Weekend timeframe since 2007 took place this 2015…now every weekend continues to show activity…the signs of a secondary home market recovery are at last fully evident.
The busyness in Vancouver (a primary residence area) for the past 3 years made it difficult for sellers in discretionary coastal markets to understand the lack of action. This was true on Vancouver Island and on Sunshine Coast, as well as on the Gulf Islands. A “by choice” decision can be put on hold until confidence returns.
Early whispers of improvement were there in some discretionary areas by late Fall, 2014. Now, however, we are seeing general activity everywhere in all coastal markets, and 2015 does appear to be the year of authentic recovery.
A seller’s opportunity? Yes…but pricing has not yet stabilized to match the sales volume increase.
We are just now entering what I always see as our main sales window (mid-May to end of September). These next weeks see the beginning of boating season in this unique protected waters marine region. Many special events and important holiday weekends take place…visitor experiences bring property seekers, too.
So…authentic sales volume improvement, rising price points in those sales if lower priced options, sellers achieving close to list, diminishing inventory…it’s the turn of secondary home markets again.
Sellers who followed the market down will welcome this recovery. Real estate companies will welcome this improvement. Buyers will need to become creative in their offering process, in an effort to do their “best deal”. The old real estate adage of “you make your money when you buy” is true for all market trends…and it’s not always about price.
A buyers market is characterized by lots of inventory & few buyers. A sellers market is best described as low inventory & lots of buyers. Supply & demand always dictate pricings.