January 2014, Market Analysis

January 2014, Market Analysis

I find that January in particular, & perhaps the first half of February, often carry forward the specifics of November/December of the previous year, when it comes to real estate activity. An overlap Winter Season rhythm, thus.

Salt Spring Island

Salt Spring Island

In our secondary home & increasingly seasonal marketplace, we now seem to be focused on a March Break to Canadian Thanksgiving (early October) timeline for viewings/sales. The busier months would perhaps be May, July, August, September in our particular discretionary region.

Economic global trends might make themselves more clearly felt by mid-February, too. It’s very difficult, at these opening days of January, 2014, to make any projections about real estate market outcomes for Salt Spring & the Southern Gulf Islands.

My decision this time, then, is to report in at month’s end, instead of at the very beginning.

During January, I will be reading various economic projections, local & global, & will be attending significant economic think-tanks, & will also be keeping in touch with real estate sales outcomes throughout the Gulf Islands & on Vancouver Island. A month of assessing….

On the Coast, the recent B.C. Ferries decision to both cut numbers of sailings/& to raise fares on some ferry routes, may have a substantial impact on the Gulf Islands. It’s a key issue for all coastal communities & local Chambers are connecting to deal with this…including Salt Spring’s Chamber.

Look forward to reporting in to you, at month’s end, with my various findings.

It does appear that secondary home markets are seeing a slow uptick in activity, after a good five years of inaction on the part of a buyer. Sales volume did improve throughout 2013. Price points were still mainly in the entry level residential category.

Is it a sustained growth pattern, though, & will it now encompass all property types & price categories? Will 2014 be the visible face of an authentic real estate recovery in our “by choice” Islands environment? More later!

We are so lucky on Salt Spring Island & on the other Gulf Islands to enjoy a temperate climate, with the ability to be self-sufficient, & yet with proximity to major centres…apart & yet connected. The definition of a pleasing 21st Century lifestyle?

If you are thinking of a property purchase on Salt Spring Island, or on another Gulf Island or on Vancouver Island, please contact me. I look forward to bringing my knowledge (of both inventory & of trends) & expertise (managing broker’s licence & strong negotiating skills) to your benefit. Call me, & discover the difference that does result in connections between a seller & a buyer. The successful outcomes for you, the client, are my motivation.

How may I help you to buy your special Island property?

December 2013, Market Analysis

It’s been an interesting year in local real estate & also in the larger world’s political & economic environments.

The 21st Century is about connectedness, & that means that nothing is too small an event, anywhere in the world…it has an impact on all other regions. The “butterfly effect” is now our global reality.

December 2013, Market Analysis

It used to be said that economic trends were global, but real estate was regional. I’m not sure that this is the case any longer. Marshall McLuhan’s forecast back in the 1970s, of a global village, has come true.

Salt Spring Island, the Gulf Islands, Vancouver Island (outside of core Victoria), & the Sunshine Coast are all secondary home marketplaces…retirement, recreational…discretionary choices, thus. They mainly rely on a non-local buyer profile…someone wanting to move there from somewhere else.

No one “has to” buy a property on Salt Spring, on Mayne, on Galiano, on Thetis, or on any other Gulf Island. No one has to buy in Tofino/Uclulet, in Parksville/Qualicum, in Yellowpoint, Maple Bay, Cowichan Station…or in Sooke or in Courtenay/Comox…or in Sechelt, Robert’s Creek, Gibson’s. These are all regions that have to be chosen by that mainly non-local buyer…thus, the buyer is always in charge of the “where” & the “when” of purchases.

Read the full article…

November 2013, Market Analysis

November, 2013.

Drummond Park

Drummond Park, Salt Spring Island, BC

Change is the mantra of our times…doesn’t matter what is under discussion.

The Internet & its very broad brush, erasing past scripts so new responses can emerge, just continues its message of shift.

Nothing escapes it.

All business models are affected & real estate is no exception. A consumer in charge, & a search rhythm that channels information gathering, are just two aspects of change.

Big picture societal shifts are also well underway.

Is the age of jobs over? If it’s a technology time, then disappearing traditional jobs may never reappear. Is the education system set up to train the engineers & programmers now needed?

One reads think-tank pieces about the hollowing out of the middle class, with fewer people doing well financially & more sliding into lower levels. Is retraining the answer?

Perhaps our time has more in common with the beginning days of the Industrial Revolution…the older Agrarian world was erasing. For a time, the old & the new co-existed…then the wealth tied to land was replaced by wealth from trade & the globalization of Empire.

It must have been a painful shift for those on the Agrarian/land side, & very exciting for those inventing what we now call the Industrial Age. It was a revolution, as it changed a way of thinking about life & one’s place in a social fabric. Dissolution and opportunity, all at the same time. Sound familiar?

Styles of living, with an aging population, are also something to be considering.

A couple of years ago, I wondered, on my radio show, if the boomers would reinvent aging the way they reconfigured childhood & early adulthood…thinking that those who once loved the group/commune life might also enjoy a personal pod space with a community cooking/meeting area.

Just read in a recent Time article that this concept of the tiny home, in a “village” layout, with a communal lodge nearby, is being successfully developed in Texas & in Oregon. One future option for that last third of a life span? Is this a concept that would suit a Gulf Island retirement concept? As Aristotle reminds us, we are a social animal. Isolation is not good for us.

Hmmm…a global village (thank you, Marshall McLuhan, for your imagineering in the 1970s), with a flattening of boundaries due to the multinational culture. A method of communication, the Internet, that furthers a no geographical boundaries world…at the same time that it’s erasing the concept of individual privacy and the idea that the personal & the corporate are separate entities.

Wow…a lot for the remaining hybrid beings (with memory of a pre-Internet world & a knowledge of the post-Internet one) to cope with? Doesn’t matter…the post-Internet beings treat it all like wallpaper…which it is, of course. Important to be in the “now”, always.

So: real estate markets follow cycles, like any market & consumer-driven item. This may be a natural recovery underway, then…year 9 of a 10 year cycle. Plus, societal shifts may be creating a safe-haven seeking…to preserve capital & to seek a level of self-sufficiency. Fear as a motivator! Certainly, for the first time in a 5 to 6 year downturn, in all secondary home/discretionary/recreational regions, there is evidence of a slow uptick.

The ways of connecting a buyer with a seller, however, have dramatically changed…especially in a discretionary region. What does this mean for you? Call me.

On these Gulf Islands/on Salt Spring Island and on Vancouver Island the activity, since early 2012, has been mainly in the entry-level residential segment…up to $700,000, say. Perhaps investor-buyers, seeking tenants/passive income stream? Maybe end-users, seeing the huge value in a recreational purchase after an almost 6 year flat time? Sellers are highly motivated & prices have reduced around 35% since 2007…it might be the last stages of a buyers market, & finally the secondary home regions are seeing this buoyancy, too.

October 2013, Market Analysis

October, 2013.

Ganges, 2013

Ganges, 2013

It’s odd how the Pacific Northwest Coast has a “tail of the dog” pattern in real estate sales…you know: last down & last up.

The real estate market in many other regions in North America is showing a strong recovery. This began in 2012, unexpectedly & strongly. Yes, it began in entry level residential, but it has now segued into the upper tier priced residential options in many areas.

Yes, the buyer is still in control in the upper level pricings category…not so much in the entry level residential segment. In some regions, there are multiple offer situations, price solidity & even price uptick, as inventory thins. Pricing is always driven by supply & demand. As sales remove upper tier priced properties from the market, we will see price solidity there, too.

What is driving the demand? Perhaps a recognition that the value of cash is negligible? Hard assets can become a vehicle to preserve capital.

Along with that, there is a sense that our long accepted world is imploding…change is the mantra of our post-Internet time…perhaps a purchase in a discretionary/resort based/secondary home environment might be seen as a safe haven investment?

On the Pacific Northwest Coast, outside of the city/primary residence markets (Vancouver & core Victoria), it’s been a very slow uptick…the secondary home/discretionary marketplace follows its own rhythm. It has been very flat for past 5 to 6 years. So important to look down the highway & not in the rear-view mirror. Shift happens fast!

While undeveloped land, commercial/business options, & very high-end residential properties remain fairly flat, there are whispers of uptick.

It may be that this Fall Market will be the end of the buyers market pattern in our kind of coastal market. This secondary home/discretionary marketplace includes all Gulf Islands, all of Vancouver Island outside of core Victoria, & the Sunshine Coast. These regions are about choice…not necessity.

However, a seeking of a safe haven is a powerful motivator to action (action has been lacking in the past 5 to 6 years, in all secondary home markets…Spain, Aspen, Salt Spring Island, Palm Desert, Hawaii, Turkey, Tahoe, etc…now, potential buyers appear to be seeking out those slightly apart enclave areas…a pleasing lifestyle but not visibly so)…hmmm…describes Salt Spring & the Gulf Islands very well!

I have often thought of the Gulf Islands, including Salt Spring Island, as the castle…the moat is the sea…the drawbridge is the ferry access. All the amenities/services required for a pleasing 21st Century lifestyle, with that yesteryear apartness, are all certainly available on Salt Spring Island. Plus, a temperate climate that encourages vineyards, olive groves, orchards, that 10k locavore experience…one can be self-sufficient here.

It is, post-Internet, an international buyer profile on the Gulf Islands/on Salt Spring Island. Time is a component in all sales. Time to discover, time to ponder & to compare, time to choose. It can take one to three years to sell any Gulf Island property, in a “normal” market…in a suppressed market, perhaps five to seven years. No one “has to” buy a Salt Spring Island or Gulf Islands property…it’s always by choice & so is beyond market statistics, in a way. Days on market are irrelevant in a discretionary region…price reductions to generate action don’t work…a buyer has to feel the confidence that it’s time to act. In a downmarket economy, discretionary purchases can be put on hold. That pretty well describes the past 5 years!

There are cycles in all markets, and we may be heading into year 9 of a 10 year cycle. We should experience a market uptick in pricings, then, quite naturally, & of a significant nature, as sales build.

On top of that, we have the societal shifts wrought by the Internet, and we also have the continuing repurcussions of the economic meltdowns of late 2008. Preservation of capital is on everyone’s mind. Physical safety is a concern. Is it possible to be slightly apart & also to be self-sufficient?

All of this uncertainty may be the key driver back to real estate investments in secondary home markets…a flight to safety, both physical & economic.

Call me about the advantages to an investment in Salt Spring & Gulf Islands & Vancouver Island properties (Vancouver Island is perhaps just the largest of the Gulf Islands). I look forward to sharing statistics with you, & to discussing the slow forward momentum in real estate sales in this particular coastal marketplace.