November 2012, Market Analysis

Here we are, easing from Fall Market into Winter.

This has been a continuing slow year in real estate sales, but it has been busier when compared to past three years.

There has been a definite rise in sales volume in the entry level priced residential segment, but only marginal action in the upper tier priced residential category.

Very substantial price reductions continue to come in, from all companies, in all property types. These reductions do not necessarily bring increased showings or offers. They do encourage other sellers to follow suit, in order to remain competitive in pricings. At the point of an offer, the buyer often delivers a further serious price reduction, in spite of consistent price drops en route.

So, sluggish conditions & further price instability, in entry level residential options. Lack of interest in undeveloped land choices. Little interest in commercial/business opportunities. Sporadic interest in upper tier priced residential offerings, & very significant reductions at the offer point, in most cases. It remains a very uncertain market, then, with periods of inaction across the board.

It is marginally improving in that lower end priced segment, but there is no certainty that this means consistent stronger conditions on the horizon. Media reports, which share information from the recent past, are still highlighting gloom re economic statistics. In Canada, they talk about potential real estate bubbles.

So, Year 8 of an 8 to 10 year cycle now coming up?

Implying a resurgence in sales, though not in pricings? Perhaps…. Early Spring will tell the tale. It appears that the last two months of a year ease into first two months of the following year. Takes until March, then, to see any shifts.

A seller needs to be patient…in our kind of discretionary marketplace, the buyer is always in control of the where & the when of any purchase.

In this kind of uncertain economic time, price reductions don’t necessarily create a desire to act, on the part of a buyer.

No one has to buy a second home or retire in any particular timeframe or purchase a recreational or a holding property. It’s always by choice, in a secondary home market.

Confidence in the overall economy will generate buyer action in a discretionary region.

 

If price does propel action, it will be driven by such a steep price drop, so much lower than assessed or intrinsic value, that it cannot be ignored by a potentially interested buyer.

Even then, the buyer will have to be targeted towards this island, with some knowledge of the deep cuts over the past 3 to 4 years. It can take significant time from a discovery on the Internet to physicality on island, to view.

General inquiries are where a process may begin, but it can take a good two to three years for an outcome, regardless of market trend in play. Buyers do not have to hurry to a decision…there is no immediacy to action in a secondary home region.

What to do then, as a seller?

It’s important to remain visible on the digital options…targeted print, with an auxiliary Internet presence, perhaps…

…the Internet, though, is truly the driver to eventual outcomes, in our 21st Century business model. The Internet never sleeps. It has erased time & geography. If you’re for sale, you need to be visible there.

It’s all seasonless now, & when a buyer sees you, it’s all new to them. Time lags, from a seller’s perspective, are not part of the buyer’s perception. So, more patience on the part of any seller, in any discretionary area.

For several years on Salt Spring, a printed monthly real estate supplement, put out by our weekly newspaper, was the sole vehicle for advertising property listings. This all changed with the Internet search engine. This supplement has now gone from 12 issues to 7…it is always woefully out of date, as info is given to them, to print, a good two weeks before it appears. This old style print supplement is not seen until the buyer comes to the island…it does not “bring them”.

 

choice of a particular island

Marketing to the potential buyer now requires the ability to focus on & to encourage a choice of a particular island.┬áThe Internet certainly erased time & geography. It opened an area to a much wider audience. In doing so, it also opened up a broader choice…suddenly, “some place” was in competition with “every place”. Ah…more reasons for time lags. Can’t choose yet, because we haven’t seen it all yet! Too much choice creates reluctance to act? Perpetual looking is an outcome? Hmmmm….

Time…& yet not time…busy and yet not busy…rumours of improving trends in real estate at the same time as media reports from banks and government sources that further downturns are ahead…in a transition moment, all things are on the table, all at the same time. This kind of confusion often forecasts a significant shift. The question: up or down?

Not biz as usual is about all that one can say, firmly.

No matter the market trend, Salt Spring & the Gulf Islands offer spectacular lifestyle opportunities. It’s always a good time to be a buyer, if the time is right for you. It’s always a personal choice in a discretionary area.