June & July 2015, Market Analysis

Well…here we are…it’s the month when the calendar spells Summer…& the great Pacific Northwest Coast erupts into lush beauty.

Salt Spring Island and the Southern Gulf Islands are nestled in the heart of the very best protected boating waters in the world…and summer-summer is the premier season of all.

Sailing, kayaking, power boat discoveries…fishing…hiking, walking, climbing…farm gate stalls & farmers markets pleasures…galleries, studio tours, theatre, dance, live music venues around the town…spas, alternative health explorations, meditative & restorative experiences…it is all here, for your enjoyment, on special Salt Spring Island.

Salt Spring Island

I often think that real estate sales mirror visitor arrivals, & so the importance of tourism cannot be ignored in any secondary home/discretionary area.

One visits, falls in love, calls a realtor, & then everyone else gets busy: designers, architects, contractors, soft furnishing providers, painters, excavators, septic installers, well drillers, landscapers, gardeners, galleries, food providers, restaurants…you name it…it starts with tourism (which also initially benefits restaurants, hotel, motel, resorts, B&B providers, car and scooter rentals…boat & kayak rentals, fishing charters, whale watching tours…vineyard wine tastings, farmers markets)…you get the drift.

Salt Spring Island

The main industry on Salt Spring & the Gulf Islands is tourism…and all businesses benefit, whether at the front end or the back end.

The good news?

Visitors are back. Travel to the coastal regions is experiencing a resurgence. And the real estate markets are also on the “improve” side of the equation in all the “by choice” marketplaces. That includes on Salt Spring Island & the Gulf Islands.

A real estate recovery always starts in the entry level residential category. As sales volume increases and inventory “thins”, in this beginning property segment, then either the buyer has to raise the expectation level price-wise, or has to buy inexpensive raw land and build a cottage or move on a modular, to stay on budget. This is another strong sign, the sale of raw land parcels, of an authentic improving real estate market trend.

Many sellers on the Gulf Islands & on Vancouver Island, in the past 5 years, had wondered why the very brisk sales in 4 key neighborhoods of Vancouver had not spilled over onto our side of Georgia Strait.

Well, it’s the great divide between a city/primary residence market and a rural/secondary home marketplace. Totally different dynamics are in play.

In a downmarket, buyers can put a purchase in a discretionary market “on hold”… and indeed, this inaction on the part of buyers characterized the past 7 to 8 years on Salt Spring & the Gulf Islands. Same story on Vancouver Island & on the Sunshine Coast.

Similar statistics in Whistler & in B.C. Interior communities…no one has to retire or choose a softer lifestyle or purchase a recreational/second property for summer/weekends use…one needs a level of economic confidence to consider such “extra” property options.

Now however, (after 7 to 8 years of inaction from buyers) activity has begun…and soon it will be in evidence in all property types and price ranges, in all these recreational/retirement venues.

Salt Spring and the Gulf Islands are very different from small coastal towns on Vancouver Island & on the Sunshine Coast. The Gulf Islands are a part of the Islands Trust, a government body that was created in 1974, to preserve & protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. Salt Spring is not a municipality.

The two trustees & the CRD representative (elected positions) are the form of governance…the restrictive zonings/bylaws, put in place in 1974, to severely control growth, remain in effect.

I think the lovely things of value on the Island have been created by volunteers: ArtSpring, Trail & Nature Club, Island Natural Growers, the Rainbow indoor pool, the Library, the pathways linking the Villages, various clubs & organizations, etc)…all the positive outcomes to benefit the community are the result of volunteers, and their fundraising efforts. Wow! An entrepreneurial & generous community, indeed.

So, when the real estate recovery starts, it’s not immediately even-handed. It begins in the entry level category. As inventory disappears, prices stabilize. The spread between list & sale narrows. In the end (say a year out?), all properties will find their buyer.

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At the moment, we are often seeing substantial price reductions at the point of the offer, in the high end residential. These dream properties are unique/”one offs”…when one sells, that’s it…thus, just as in the case of entry level properties, that spread between list & sale prices in higher end opportunities will also narrow.

Salt Spring & the Gulf Islands basically had growth “capped” when the Trust was created. It’s about supply & demand, just as we learned in Economics 101.

There is a lot of “unrest” afoot in the world. Things that used to “work” no longer do so (thank you Internet world). Economies pretend to recover. Underneath it all, a subtle return to hard asset investment choices is underway. Keep an eye on the fine art sales at major auction houses. A purchase of a unique item is a preservation of capital move, I believe. A purchase of a property where growth is curtailed is a marker of overall uptick, in the long term. Supply and demand is the key. Safe haven investing? More info? Call me!

The good news right this minute?

The amazing Gulf Islands & Salt Spring Island are seeing an authentic recovery of the real estate market, after a very lengthy “pause” (7 long years?). All good news.

In real estate, no matter the terrain of market trends, there is always opportunity. In a shift, one just needs to reposition.

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.

Salt Spring Island

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.

Salt Spring Island

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.

April 2015, Market Analysis

April 2015, Market Analysis – Salt Spring Island

Salt Spring Back to The Seller Side

Yes, it’s true…the real estate market is turning back to the seller side of the sales equation in the secondary home marketplaces…good news indeed for Salt Spring Island & Gulf Islands & Vancouver Island owners.

On the Pacific Northwest Coast, which includes all Gulf Islands, including Salt Spring Island, plus Vancouver Island, plus Sunshine Coast, the secondary home/recreational/discretionary marketplaces are all definitely on the improve.

Inventory has “thinned” dramatically in the entry level priced residential segment. Slow sales in this price category, over the past 2 years, have quietly erased inventory backlog. Affordably priced undeveloped land is now beginning to sell as a result…buying land & building a cottage or choosing a manufactured home allows one to keep the budget at that entry level price point.

As inventory “thins”, prices stabilize. In some cases there are already small bidding wars.

Buyers who are able to increase their budget are starting to look at higher priced residential offerings, for more choice & potentially more motivated sellers.

For The Luxury Buyer In Salt Spring

For those able to consider a purchase in the luxury/upper tier priced property segment, there are still deals to happen, for a buyer. It may take until the Fall Market to see stability in pricings in the over one million category. Right now, this property segment is experiencing the uptick in interest & resulting lower offers that the entry level category experienced during the past two years.

I think when we arrive at late September/mid-October timeframe, we will see an even-handed recovery firmly underway.

I believe we are in the very last stages of a transition period, here, in our coastal region, between buyer & seller markets.

My definition of a buyers market: lots of listings & no buyers. And a sellers market? No inventory & lots of buyers. I think we are moving to that sellers market description.

It has been a long 7 years in all the secondary home/discretionary markets, & globally so. Some areas may even have experienced the “pause” 10 years ago. Within our overall coastal grid, places are never evenly busy.

British Columbia, An Undiscovered Coast

On this still relatively undiscovered Coast, we are always the tail of the dog. Now, however, we are seeing dramatic improvement…sales volume to date, for Salt Spring, has improved by close to 30% over previous year. Price stability has just begun…price increases may be on the horizon, but not just yet. This upward sales volume pattern is in evidence on the entire coastal rim.

Our discretionary area sales window runs from March Break through to Canadian Thanksgiving Weekend (mid-October). It remains a weekend business until mid-May, perhaps. Late June to late September remain the busiest sales months.

A seasonal marketplace once more on the move…plus, a lower Canadian Dollar against the U.S. currency…plus a general safe haven seeking in this turbulent global political & economic time of change…& the ability to live anywhere while working in the digital universe…it all adds to the general rhythm of uptick.

Salt Spring – The Allure of A “Caring Community”

The allure of a caring community is another attraction of the secondary home regions. An aging in place demographic, a strong community service volunteer group, a caring underpinning to the Island…this certainly describes exceptional Salt Spring Island.

Yes, it’s different than the flat conditions of the past 7 + years. However, there is always opportunity. The key? Recognizing it when it appears before you, and then acting on it.

An outcome of the global search is that it throws up a lot of surface information…& a lot of choice usually means slowness in action. The “have I seen it all yet?” syndrome. So important to listen for the “ping”. If a property lights up for you, then that’s the one to act on. It’s about listening to our inner voice.

I sometimes think searching property sites has become an entertainment feature…kind of like a 90s sitcom…look but not act. For an investment uptick, though (always better to buy on a rising market), now is the time for buyer involvement.

Continuing low interest rates are in favour of the buyer, for the time being.

Although inventory is thinning out in the affordable price segment, there are still creative ways to remain on budget.

Salt Spring Island Real Estate – An Appreciating Asset

An investment on a Gulf Island, including on Salt Spring Island, the largest & best serviced of this “southern” grouping, remains a good investment. Over time, a property purchase on Salt Spring Island & the Gulf Islands will build in value.

The Islands Trust put a cap on growth back in 1974…through strict zoning/density bylaws controls. Supply & demand is a factor in a Gulf Islands market, due to the Trust’s non-growth policies.

Enjoyment of a property is also a valid marker of value for a discretionary region. That enjoyment may include the ability to be self-sustaining. The benign micro-climate in our coastal environment makes this possible.

Yes, all markets are like a wave…up, down, up, down…never static. In real estate, it seems that the down never falls as low as the previous down. Thus, over time, a steady increase is consistently shown. On the rise, the fix & flippers start to reappear. Savvy ones are acting now.

Between 2000 & 2001, sales volume rose 50%. Between 2002 & 2005, prices rose 60%. A slowing trend took place between 2006 & 2007. Then the economic collapses of late 2008…now, at the beginning of April, 2015, we seem to be emerging back into 2002 times. Possibly we will look back & decide that 2010/2011 were the true flat bottom years in our discretionary area.

In change lies opportunity.

March 2015, Market Analysis

March 2015, Market Analysis – Salt Spring Island

Yes, it’s true…real estate in the secondary home marketplaces, including on Salt Spring Island, continues to strengthen.

Clicking into Place

Ganges Harbour

Our season for coastal discretionary regions runs from March Break to the Canadian Thanksgiving celebration in October. More outcomes to be reported on as activity goes forward…the season is just now clicking into place.

Prices on Salt Spring have not yet stabilized, to date, but sales volume has increased. It may take until May to see the true pattern of 2015’s market rhythm for the Gulf Islands.

Meantime…forecasters are noting continuing growth in primary residence/city markets, including from the elder population.

Remember that Country Mouse/City Mouse story? It was a “grass is always greener” alert…Country Mouse was convinced City Mouse’s life was much more fun, & City Mouse returned the favour…just so certain that Country Mouse had the best of all lifestyles.

You know the rest: they switched lives and discovered the old truth that we are usually happiest right where we first find ourselves. Well, most of the time.

Early & Later Retirement

This aphoristic tale might need a little updating for our times. With life expectancies extending dramatically, we might need to separate retirement years into two sections: Early and Late(r) Retirement.

My thought about this is real estate oriented, as it’s about the advantages/disadvantages of primary residence (city) and secondary home (rural & small town) lifestyles, as one truly ages.

In the early 1990s, pre-internet impact, there was an entire movement being discussed, called Penturbia. The idea was that people would retire & leave the cities to seek pleasing small towns…thus leaving a primary residence region for a secondary home area.

Small towns had infrastructure (hospitals, health services, cultural options, rural beauties on their boundaries, some had colleges/universities, & many offered amenities to allure one in those retirement years. What was that hobby you always wanted to explore? You get the idea).

Now, in the real post-Internet world of 2015 & on, there is a supposed move back to the city from small town/rural regions. Forecasts say that over 70% of the world’s population will be living in cities, in the very near future.

There is also the thought that elderly seniors will prefer to walk to services/amenities and will prefer to live in the heart of cities. It’s not a suburb experience that’s being sought…it’s a move to a downtown core.

Hmmm….

In this great Pacific Northwest Coast region, what are some of these potentially impacted smaller townships?

On the Vancouver Island side of Georgia Strait, we could look at Duncan (the main hub of the very large Cowichan Valley, which includes Mill Bay, Cowichan Bay, Maple Bay, Yellowpoint, Lake Cowichan), plus at Nanaimo, at Parksville/Qualicum Beach, at Courtenay/Comox, at Campbell River. Let’s not forget Port Alberni & the wild west coast (Uclulet & Tofino).

What about the lovely Gulf Islands? Southern islands: Salt Spring, Penders, Mayne, Galiano, Saturna, Thetis. Mid-islands: Denman and Hornby. Northern: Quadra & Cortes. And what about southern Vancouver Island: Sooke, Metchosin, Saanich neighbourhoods?

On the Mainland side of Georgia Strait, we have the Sunshine Coast (includes Powell River, Sechelt, Gibsons), plus Texada Island & the Howe Sound Islands (Bowen, Keats, Gambier).

For all of these regions, a B.C. Ferry is involved in transport from the Lower Mainland, and a second ferry is required for a Gulf Island. Or, a floatplane or land based plane as travel opportunities are also possible to these destinations.

Hmmm….

So, if people enjoy vacation places on the Gulf Islands, on Vancouver Island, & on the Sunshine Coast, and then retire to them for that first time discovery retirement age, & then live on to where they might be in that second retirement phase, what then?

Well, if we’re talking about the over 80s age group, and we are, then what about driving? In some areas, one loses one’s driving licence at age 80…regardless. Diminishing physical health may become an issue. The loss of a partner can breed isolation and loneliness.

Hmmm….

I can see that enjoyment of a recreational property between childhood (with parents) to retirement (say, age 60, to your own retreat property), will add to the quality of your life. After 80, however, what might be best alternatives?

Good transit, easy walking places, all amenities easily at hand, smaller homes with no yard maintenance (spells “condo” to me), plus options specific to aging seniors to keep those grey cells in good order…all might be on a script for positive aging. Are such aging in place elements strongly in place in a secondary home area property choice?

Behold the Second Segment of Aging

Well…there’s the challenge for all those delectable secondary home & recreational & retirement regions. To be able to remain in these scenically pristine regions will only add to the quality of life for all who are lucky enough to live in same. It’s essential, though, to be paying attention to that second segment of aging, & to meet those challenges.

Time to talk to the elected officials, whether municipal or CRD or Islands Trust…plus provincial & federal. Let’s make sure that the energizing & inspirational aspects of life in a secondary home region continue to optimize lifestyles between 80 & 100+.

The biotech revolution predicts that many will live to 100. The small town/rural options maintain a strong sense of personal community. Surely this is the key to successful aging outcomes?

Hmmm….

I think the smaller & more caring approach is key. It needs to be coupled with a physical infrastructure of ease, tailored to those physical dilemmas that capture the elderly. The personal recognition in a smaller community perhaps far outweighs the anonymity of a city environment. So, public officials, are you on this & are ahead of the need?

Salt Spring Island is well positioned in that it seems to attract a thoughtful population, & this aging in place aspect, for age 80 & older, is actively on the agenda of this unique community. Join in the discussions. Salt Spring often models out successful solutions for many community challenges…positive aging in place is no exception.

February 2015, Market Analysis

February 2015, Market Analysis – Salt Spring Island

Salt Spring Island

The reminder from that savvy Ancient Greek, Heraclitus, that we never step in the same river water twice, is a thought to hold onto. As he noted, the only constant in life is change.

3-D printer, robotics revolution, driverless car…the word is out: humans need not apply. So, if the age of jobs is over, what next?

Is the age of travel also over? Violence is found in all places. Going out to buy bread or meet a friend for coffee can result in death by violence…a politically motivated person can take events into their own hands & too bad for you, in the corner of the cafe, minding your own business, with totally distant thoughts.

What did John Donne alert us to? Never send to ask for whom the bell tolls, for it tolls for thee? That, yes, & also the reminder that any man’s death diminishes us all.

So, as usual, the poets instruct us.

Cavafey, a recent Greek poet, reminded us that there’s no point in waiting for the barbarians to arrive…they are already here…they are us. Isn’t that the news that Pogo brought back from the swamp? I have seen the enemy & he is us?

Hmmm….

Meantime, Voltaire suggested that we might want to just stay home & cultivate our own garden.

It’s difficult to offer specific outcomes in local real estate markets, when societal shifts of such a deep nature are in full swing. These societal shifts are shaping economic outcomes. Global rhythms shape specific regions…it’s called the global economy for a reason. No area is remote. The connectivity of the post-Internet world means the butterfly effect is in play.

A study of history, both far & immediate pasts, might be of some help when attempting an interpretive role.

When the Industrial Revolution exploded onto the centuries old agrarian lifestyle, it was a knife through an established & thus well understood pattern.

Today, technological innovation is slashing through the vestiges of the latter years of the 20th Century.

If you stand on the technology side of this shift, there is endless opportunity. If in the recent past…well…just read a George Eliot or Charles Dickens novel for some gloomier outcomes.

farmhouse

Big picture events colour our tiny lives. Within that frame, what does a move to Salt Spring Island, to a Gulf Island, to a Vancouver Island community offer?

Following Voltaire’s advice, a move to such rural coastal opportunities means experiencing community, means the ability to be self-sufficient, means the luxury of being slightly “apart”, without being isolated. These are safe haven venues. It is possible to be self-sustaining. More information? Call me!

Recent Salt Spring & Gulf Island sales appear to be predicting a shift from a buyers to a sellers market, in the secondary home markets. It is a slow but steady rhythm.

The tax assessments still reflect the past 7 year downturn. It may take until 2016 for the tax assessments to reflect recent sales volume uptick. Prices have not yet stabilized.

Thinning inventory will continue to highlight price stability…& possibly increases. The tail end of a transition period between market trends reflects both past & future, in the short-term.

Oceanfronts, oceanviews, acreages, building lots, residential, commercial, investment, recreational…varying types of properties, varying prices…your special property dream is out there, waiting for you.

I often find that the first two months of a new year follow the patterns of last two months of the previous year. Most sales have remained in that entry level residential segment. The spread between list & sale prices has been narrowing in this property segment…lower inventory encourages strengthening prices. Some recent sales in undeveloped land may also predict an uptick in a market. Sales growth in the upper tier priced residential market appears to be underway…price reductions at point of these sales remain dramatic.

The sudden collapse in commodities markets may have serious outcomes for the secondary home marketplaces. An Alberta buyer has been a traditional coastal purchaser.

It takes until mid-March to see the first aspects of a new year market take shape. March Break is the traditional beginning to the “season” on Salt Spring & the Gulf Islands.

I usually write my market thoughts at the beginning of a month. Between early January’s “report” & now, we saw events in France plus a continuing crash in the commodities markets…societal & economic shifts together can deliver a “pause” to a discretionary marketplace.

It’s important to act prudently. Should one make a lifestyle move to a softer/gentler place, & live more simply, & slightly “apart”? Hmmm…. Decisions, decisions. In change lies opportunity.

How may I help you to buy your special property on Salt Spring Island or on another Gulf Island or on Vancouver Island? Please contact me…your best interests are always my motivation.

Looking for information about specific areas? Information about properties and opportunities? Call me! Benefit from my knowledge (of inventory & market trends) and from my expertise (experience counts!).

January 2015, Market Analysis

January 2014, Salt Spring Island Real Estate

Welcome to these early days of the first month of a brand new year.

Named after Janus, the Roman god who looked behind & ahead, at the same time, January straddles what has been & what will be, in real estate outcomes.

Many indicators are out there that are predicting a strong transition from a down to an up market, in the secondary home marketplaces, & globally so.

Salt Spring Island, the Gulf Islands, & Vancouver Island are often the tail of the dog in a market recovery. A recovery is never even-handed. Some places & some property types recover faster than others. The good news: if every story has a beginning & a middle & an end, then here, on the coastal “rim”, we are at the close of the transition “middle ground” between market trends.

The beginning of the recovery might be seen as having become visible by October 2013. It began with sales volume increase in the entry level residential category. Prices did not stabilize.

By October 2014, all property types were finding interested buyers (undeveloped land, higher end residential offerings, thinning inventory in entry level residential options, which helped to solidify prices, & even commercial sales began to occur).

No market ever stays up or down

No market ever stays up or down. Since late 2013, then, our slow coastal region’s recovery, in discretionary areas, had begun.

I often think that secondary home sales mirror the fine art world’s sales pattern…perhaps within six months. The late Fall 2014 art action at the auction houses would seem to point towards an active secondary home sales rhythm to be in place by April/May of 2015.

Perhaps safe haven investing is the biggest motivator to sales in a discretionary/recreational marketplace, right now. If there is a concern about currencies, then a hard asset purchase might be an outcome of such a worry. It’s about preservation of capital. The plus of self-sufficiency might be an alluring factor for choosing Salt Spring & a Gulf Island as the destination. Our lower Canadian dollar against the U.S. dollar is also often an attractor to a buyer, for our area.

Hmmm….

January is a good time to attend investment conferences…listen well. Soak in the prevailing thought. Read investment articles…catch the vibe. Being informed is always the best first step in decision making.

It’s also important to act. The buyers market conditions are dissipating in the secondary home regions. Between now & April, we may see the “deals” evaporating. It has been a long seven year downturn in “by choice” markets. Indecision meant buyer inaction. That is over. Short-term, the upper tier priced residential opportunities may still see some price spreads between list & sale. The entry level market has seen price solidity develop.

If you have long dreamed of owning & enjoying a Salt Spring & Gulf Islands property, now is your moment to buy. The market is shifting upwards…which results in less inventory & higher prices. That’s the description of a sellers market.

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June & July 2015, Market Analysis