August 2012, Market Analysis

Eurozone continues to implode. Or does it? Up to the brink & then words from the European Central Bank that they will do whatever it takes, to preserve the euro economic union. Does that mean printing more money? Is it a bid to inflate out of debt?

U.S. election insecurity continues. Until the votes are counted and the winner declared, we will hear & see a battle between two totally opposite mindsets…the individual vs the collective voice.

Secondary home/discretionary regions remain sporadic in sales volume…such purchases are by choice. No one “has to” buy a second home or retreat property, no matter how engaging the area might be. An ocean experience? A mountain getaway? What about a lake enclave? A desert or a forest retreat? And on which continent? That’s the interesting thing about that great & hungry search facility…it makes some place in competition with every place. We are McLuhan’s “global village”.

Nothing can be relied on that once seemed so secure. Remember the Lewis Carroll sequel to Alice in Wonderland? Titled Alice Through The Looking-Glass, it noted that one had to run very fast just to stay still…if you stopped, then everything else, trees, animals, people, objects, just whizzed by. Hmmm…is that the description of our 21st Century experience?

Certainly, change is the mantra of the moment. In change, there is discovery. And opportunity. To make it all possible, the need for an editing function has never been so necessary. Undifferentiated data is not information. Interpretation could be the gift.

Locally, we are noting a significant sales volume uptick in residential properties below 900,000, with most action below 600,000. The one million and up category is beginning to see stronger inquiries. A slow recovery appears to be underway in the secondary home/discretionary marketplace, & globally so. Prices are not yet stable, and reductions continue to take place at the point of an offer. Our main sales window in our basically seasonless marketplace is mid-July to mid-October, so this is “it”, right now.

We may be in year 7 of a 7 to 10 year cycle, which implies improvement. The economic issues from 2008’s meltdown continue to have impact…nowhere is immune in our connected universe.

Meantime, back on the Island, the pause that renews awaits your pleasure. It’s always a good time to buy if it’s your time. You’ll know when that is.

The Island offers environmental protection. It offers all 21st Century necessities. It offers a yesteryear experience of community. It offers a thoughtful pause. It offers ease of access and the comfort of familiarity. It’s not perfect, but it’s pretty close! I call that the right kind of investment.

July 2012, Salt Spring Island Real Estate Market Analysis

The short intensity of our “season” is upon us…July/August/Sept/October are the physicality moments on Island, for actual viewings.

Inquiries come in year-round, but physical presence to view happens in this short window. Often, when an offer comes in during other months, it turns out that the viewing of the property occurred during these four key months.

These months are also considered to be the best, weather-wise, in our region…definitely a correlation, then, re this timing issue.

Tourism has been the start of sales action in our Gulf Islands environment. People arrive by private boat, by ferry/car, by floatplane…they stay, meander the charms of Ganges Village & discover the environmental beauties of the Island itself…then they decide on a second home/recreational retreat or, if possible, retire & move here, to discover a new lifestyle.

No one “has to” buy on Salt Spring or on another Gulf Island…..it’s all by choice.

This discretionary quality can often mean time lags in decisions. Important for a seller to be “out there”, though, so that a buyer searching on the internet can discover their property option…even though months may go by before they turn up to view & more months may pass before a sales transaction takes place. There is no motivator to action…it’s all at the discretion of the buyer.

Sellers need to be patient & realtors need to be consistent in their marketing message. The Internet has totally changed real estate as an industry, and this is especially evident in the secondary home marketplace. The consumer is now in control, and in a secondary home/resort-based area, the consumer controls the where and the when of all sales.

That said, both the tourism discovery and the weather pattern that attracts, in this coastal region, are underway.

For the first time in almost four years, buyers are back in our area. Appraisers feel that prices dropped around 35% between mid-2007 and mid-2012. Sales volume this year, however, has gone up over last by around 40%.

The sales activity between January 1 & end of June has mainly been in the entry level residential category. Starting in mid-April, the buyer was having to come closer to a seller in offer price point…before that, a seller had to drop further, never mind the reductions en route, to meet the buyer. The difference? Thinning inventory in the entry level residential segment creates price stability.

Prices in the upper tier priced residential options are not stable. The very few sales between one million and 1.5 still show large reductions at the point of the offer.

Undeveloped land sales and commercial property sales remain “flat”.

At this beginning moment, first of July, we may see a build-up of activity in the upper tier priced properties. Between 2007 and present day, most have seen price reductions in the millions…as they slowly capture a buyer’s attention, price points drop substantially further at point of the offer. In this still sticky segment, the buyer reluctance remains a factor.

So…price stability & thinning inventory in entry level residential, lack of consistent interest in upper tier residential, with accompanying severe price reductions when a sale does take place, and no interest yet in undeveloped land or in commercial opportunities. Hmmm…sounds like a market in flux, to me.

Markets are cyclical, and we may be in year 7 of a 7 to 10 year cycle…this implies a natural uptick in activity. Thinning inventory foretells price increases. Undeveloped land sales/new construction will follow, as good residential options sell off. The upper tier options will also improve in sales as a safe haven seeking continues to grow.

So important, in a shift moment, to be looking down the highway and not in the rear view mirror. A positive change is underway in real estate investing.

We are just entering our “season”…and the larger market cycle is slowly upticking. As a seller, this is good news for the first time in four years. For a buyer, it’s an alert to act now…that proverbial buyers market does not last forever, and by this time next year may have vanished entirely.

Perhaps this is the sales volume season?

More information? Call me! How may I help you to buy or to sell your special Island property? Look forward to bringing my knowledge (of both inventory and of trends) to your benefit.

June, 2012

June, 2012.

June…a feast for the senses in our part of the beautiful Pacific Northwest Coast.

The month of roses, of lilacs, of snapdragons, of lavendar, of orchards blossoming to fruition…lush and fragrant and so inviting!

Salt Spring and the Gulf Islands are a part of this envelope of largesse. Breathe it in…enjoy those patios that offer cappuccinos & green tea lattes…kayak out to meander Ruckle Park…dream into the sunsets from Vesuvius Beach…be inspired by vista (2) vistas…ocean and islands and mountains melding into silver and light. Beauty everywhere!

Lucky to be a visitor, lucky to be able to live here. Sometimes, though, it’s about timing.

Market-wise, we are nearing the half-way moment in this year’s rhythm.

To date, the sales action has continued in the entry level priced residential category.

The price ceiling for this property segment has been rising and inventory has been thinning…both good signs that a slow uptick is underway. This appears to be a general feature in all secondary home/discretionary areas.

Good news, after the past three to four “flat” years in our kind of discretionary area. No one “has to” buy a second home or a recreational property or a retirement investment…such marketplace regions can be put on hold, during troubled economic times. That describes the lack of action in the immediate (four year!) past.

Markets move in cycles. Are we in year 7 of a 7 to 10 year cycle in real estate and hard asset investing? If so, then we are in a natural upticking pattern.

By Spring of 2013, we should thus see increasing action in the undeveloped land & upper tier priced residential & in the commercial options. By Fall 2013, it should be a seller’s market once again.

Sound impossible? Motivation to preserve capital & to seek safe havens may be the propellers to this shift.

Those sellers who were able to wait out the downturn years will benefit from this shift into more buoyant times.

It is what it is, though, and, in a sense, we are all prisoners of our time.

Choice is the name of any secondary home marketplace…no one “has to” buy a recreational property, or a retirement option, or an investment purchase…it’s all at the behest of the buyer. We can be put “on hold” until things improve.

On the other hand, there now seems to be a move towards preservation of capital…a safe haven seeking. That is a strong propeller to action.

So, at an authentic shift moment, everything is on the table…up, down, seller moving towards a buyer and buyer moving towards a seller…it’s all there, and all at once! Inventory clean-out is a part of it, too.

At this beginning moment, at the start of June, much is yet to come forward. Our real market is July/August/September…almost upon us!

Meantime, enjoy the beauty of our area…a place to restore the soul!

May 2012, Salt Spring Island Real Estate Market Analysis

Copyright, Li Read, 2012

May, 2012.

It’s Spring in more ways than one…the slow uptick in the real estate market continues. Is this the renewed market everyone has been seeking?

Beginning days of improvement are underway, after the severe three year “Fall & Winter” flat/inaction in the hard asset investment choices…now there is a re-emergence of sales volume…are we in year 7 of a 7 to 10 year cycle? Perhaps.

If so, it’s a natural progression towards stability & growth. All markets follow cycles, and the feedback from all regions is that sales volume has jumped up in the entry level priced residential property category. Prices are still volatile.

This entry level pricings segment always improves first…in our local region, we have seen a sales volume uptick of around 30%, although the majority of sales to date are below 700,000…& most sales still fall below 500,000.

Prices are not stable and there are still serious price reductions at the point of an offer, in spite of earlier reductions en route to the offer.

Action in the upper tier priced residential category remains very spotty/flat…undeveloped land options & the commercial segment remain without interest.

Nevertheless, an increase in sales volume of around 30% in the first quarter is a sign of an emerging market. And in our specific area, this renewed activity is fully there at the beginning of our traditional “season”: May to early October. Good news, then, to have seen the first quarter busy when it should be & in the price level it should be. Timing is key to all markets.

Throughout North America, strong sales & thinning inventory are the outcomes of this first quarter activity, & this is now the case in secondary home/discretionary regions, too. Something new! Yes, the strong sales action is mainly in entry level priced residential properties, but this activity is seen across the board.

By July, all media options (they are always behind a market trend, as have to rely on statistics from past months) will be reporting this shift into renewed buyer action.

Why now? Perhaps the fear that cash is eroding as a means to preserve capital is making buyers reappear? Currencies are suddenly perceived as insecure, & there’s a growing desire for a safe haven, a seeking to be self-sufficient, a fear of the stock market’s volatility?…these all might be some reasons for the return to hard asset investment choices, & a resurgence in interest in discretionary properties. Suddenly, a purchase of a unique property in an area like the Gulf Islands is perceived as a good holding.

With huge uptick in entry level sales, which brings strengthening of prices & thinning inventory, and at the time of year this traditionally happens (first quarter), we are positioned to now welcome upper tier priced property buyers, & investors in land. May, July, August, early September are the key months, traditionally, for that investor buyer to appear.

The property market in secondary home/discretionary regions slowed in 2006. Sales volume decreased & a pause was very evident by 2007. The economic collapses of 2008 afflicted all regions, globally.

Primary residence/city markets saw a soft uptick in entry level sales by 2010…the secondary home/resort based marketplaces remained sluggish. Low interest rates never seem to jumpstart action. Buyers set markets, not sellers or realtors. When a buyer is “on hold” (& no one “has to” buy a second home or retire in any particular timeframe), then nothing will happen in a discretionary marketplace.

Price reductions don’t drive action. Those sellers who had the option to do so, and did remove themselves from the market, were wise. Pressure from companies to reduce prices (without an outcome) was perhaps understandable, from the company’s point of view, but it was not reflecting the buyer voice. When a buyer says: “I don’t know…I”ll think about it”…they mean it!

Now, the buyer is back, for the first time in the past three year period. The secondary home marketplace is busying up. By late Fall, we may see action having occurred in upper tier priced residential, in undeveloped land opportunities, & in commercial/investment options. We may be approaching year 8 of a 7 to 10 year cycle, and so should see thinning inventory/price stability/some multiple offer situations for unique & irreplaceable property options. Those owners who waited it out were wise; not always possible to do that, though.

The real estate industry itself continues to shift dramatically, in our post-Internet world. Change is the wallpaper of our global village. Thales was right that we never step into the same river twice. Now, as we enter May & the beginning of our “real” (& very short!) season, the buyers are back in our kind of market-by-choice, & the uptick is here. More info? Call me!

Don’t be looking in the rear view mirror…time for that down the highway vista!

Sales volume + thinning inventory + stability of pricing = movement to a sellers market.

And your thoughts are? Always welcome!

How may I help you to buy your special Salt Spring Island or Gulf Islands or Vancouver Island property? Call me!

Up & down…around & around…change, of course!

Change, change…everywhere a change….

Wasn’t that a theme from one of those 60s anthem tunes?

Whether one was there or simply studies those years as history, it’s clear that the current societal shifts were starting their baby steps of change in the latter years of that turbulent decade.

Another moment when the overwhelming numbers of the baby boomer generation bulged through. That time around they changed perceptions about the role of youth…all societal tenets were suddenly up for discussion & wholesale reworking.

It was still a top down world, though. Technology had not yet delivered power to the consumer of the culture. Clash was not just the name of a rock group…combative stances were the name of the game.

Creating change meant battling for the new paradigm. Amerika…names like Jerry Rubin, the Weathermen, Angela Davis, the Black Panthers, & the various liberation groups, including women’s lib & Gloria Steinem’s publishing power bid with Ms Magazine…was Archie Bunker the Seinfeld of his day?
The background sound was the helicopter confusion of the Vietnam War. Don’t trust anyone over 30…& Dylan’s Subterranean Homesick Blues said it all.

Lots of events between then & now. That hippie ethic, though, the short-lived alternative universe of that SF summer of love, a media myth perhaps, resulting in the spontaneous combustion of Woodstock, may just have gone underground between then & now. Was it that Woodstock moment, though, that reminded everyone there was power in sheer numbers?

Aging boomers, about to bulge through the next segment of life’s rhythm, aging, are changing perceptions about this final third of life…watch the latest crop of tv commercials…pharmaceuticals, to alleviate getting old, are here, there, & everywhere.

So, whether you’re in your 20s or in your 60s, time to dust off the past & look it in the eye. The 1960s began the march to bottom up & egalitarian level playing fields. The tool that delivered the possibility of the vision is our technology.

The boomers in the digital world created sleek devices, alluring & able to be held in our hand, fitted into a pocket, that allow every one of us to affect our immediate & our larger worlds. The meshing of inner & outer is possible.

Your voice is as important as my voice or his voice or her voice or as the CEO’s voice or as the president’s voice…what do the buddhists say? There is no them, there’s only us? Hmmm….

Connection is all. Otherwise, why the texting craze, 3000+ texts in a day, between friends, who only live a block apart. The same medium connects people 8000 miles apart. So, no possibility of separation, now? The commune ethic of connectedness between like spirits is with us? Geography & time have been erased?

Change is really just a scrub brush. There’s an abrasive quality to it, of course, as it scours out the past & so allows the smoothness of the future to unwrap itself. There’s no good or bad in it…it just “is”. Our opinion about it doesn’t count.

As Thales remarked, when observing a river: one never steps in the same water twice.

So, change. Affects how we live, how we work, how we communicate within the fabric of our newly global village, how we get through our days….

For real estate, the industry I’ve been a part of since 1989, the profound changes driven by the consumer “bottom up” motif are well underway. More about this later.

If you’re 18, you don’t notice technology…it’s just wallpaper. If you’re 55, you master it & wonder how you did without it, but you’re still a hybrid…you can straddle two worlds.

Two solitudes, bridged by a smart phone? Maybe….

Could be a juicy role here, in the boomer bulge. The great data maw needs constant feeding…who better than the historian, the interpreter of our pasts, to connect us to each other?

Maybe that’s a job description for our future-now world?

And on the subject of jobs…in this information age what does that word mean? Is the day of “the job” over?

And your thoughts are? Always welcome!

When?

When?

Well, what about right now?

You know what all the great philosophies teach: there is only the “now”…the “right this minute” moment in time.

There will never be a better time than this “right now”.

Markets are cyclic in nature. Buyers Markets and Sellers Markets have rhythms…and a cycle might follow a 7 to 10 year pattern.

What goes down goes back up, and the equilibrium point between markets can be of very short duration.

Since 2006, and globally so, it has been “flat” in secondary home/discretionary areas. The result: price reductions, motivated sellers, low interest rates to encourage action, good inventory choices, but reluctant buyers.

Now, there are whispers of change, on an uptick trend…perhaps we will look back and decide that October 2010 to October 2011 was the bottom-bottom in the market. From now on, it should show marked improvement in sales volume, followed by thinning inventory, then price stability, and finally a turn into true sellers market territory. Perhaps by 2013?

My definitions:

a buyer’s market is characterized by lots of inventory and few buyers. A seller’s market: hardly any inventory and lots of buyers.

Remember the old economics law of supply & demand? Hmmm….

So, the “when” of action? Be in that “right now” moment…act when it’s good for you to do so. Weigh the options…decide if it works for you…that proactive stance will benefit your outcomes.

The eternal question: “what’s the market doing?”…well it’s on the move. How about you?

Thinking of a purchase on Salt Spring Island or a Gulf Island? Call me! The time is always good.

How may I help you to buy your special Salt Spring Island or Gulf Islands property? Look forward to your call!

liread33@gmail.com