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March 2021, Salt Spring Island Market Analysis

First Whispers of “The Season”

It’s here…the month that sees the segue from winter-into-spring. Gulf Islanders/Salt Springers recognize March as the month that brings the first whispers of “the season”.

Mid-March to mid-October is often seen as the best weather time in the great Pacific Northwest Coast, and Salt Spring and the Southern Gulf Islands benefit from a “cool Mediterranean” micro-climate. Less rainfall/more hours of sunshine…a welcome temperate pattern.

Even with the ongoing closures and pauses and delays of covid, this time of year brings with it a special enjoyment…that awakening of the earth that Spring delivers. Gardens and orchards and roadside bushes flower forward. Longer days. Sun warmth at patio coffee stops. Beauty everywhere.

The real estate market on Salt Spring is now mirroring the same explosion of sales first experienced in Vancouver and then fanning out to Sunshine Coast, to the Interior, to Victoria, and to Vancouver Island. Now it is occurring on Salt Spring and on the Gulf Islands.

The inventory of listings is shockingly low.

Most buyers are still from Vancouver. There are now multiple offers and “bidding wars” in some price ranges. Buyers do have to put their best foot forward.

Hastings House

Hastings House

The Vancouver sellers do become the buyers in all the rural/secondary home markets. The Vancouver market, which did suppress between 2017 and 2019, because of provincial government taxation measures to do so, is perhaps being driven by sales to Hong Kong based residents, with Canadian passports. These buyers ignore the provincial 20% offshore purchase tax.

It appears to be a lifestyle rewrite that is underway.

Many things are occurring: the initial covid shut-downs in 2020 pushed everyone into the digital world. The ability to work from home is now accepted as mainstream. Extraordinarily low interest rates. A desire to leave the city. A concern over all the monies being printed by governments…the seeking of preservation of capital by turning to hard asset investments. Hmmm…a perfect storm? Maybe.

Sales Data March 2021

So, at this very beginning of March, there are 31 residential listings on Salt Spring Island, not separating out waterfront, view, townhome.

  • 11 of these residential listings are between 445,000 and 998,000
  • 9 listings between 1,069,000 and 1,985,000
  • One listing at 3,100,000
  • One listing at 4,995,000
  • One listing at 5,995,000
  • One listing at 6,688,800
  • One listing at 12,000,000
  • Two listings at 14,000,000

Only 11 fall into the category of “entry level” pricings. Hmmm….. usually there might be over 200 residential listings available. This is a sellers market.

At this very beginning of March, there are 49 land listings, ranging from 239,900 to 2,495,000. (Not separating out lots, acreages, view, waterfront). Land listings up to 500,000 remain the most active, at this moment.

At this very beginning of March, there have been 51 “solds to date”. That is a huge increase in sales in the first two months of the year.

  • Seven sales have been between 199,000 and 298,000
  • Four sales have been between 430,000 and 455,000
  • Six sales have been between 505,000 and 552,000
  • Ten sales have been between 605,000 and 685,000
  • Four sales were between 730,000 and 799,000
  • Three sales were between 800,000 and 878,500
  • Five sales took place between 900,000 and 979,000
  • Eleven sales took place between 1,015,000 and 1,850,000
  • One sale took place at 5,645,000

For the first time in several years, consistent high end sales are underway. It appears that the Vancouver buyers plan to live on Salt Spring…these are not recreational only buyers.

Not Since 9/11

The entry level residential options and the lower priced land options have all sold. The last time we saw a lifestyle rewrite was after 9-11. Between 2003 and 2006, there were few listings and prices rose by 60%. However, at that time, owners, who may have wanted to cash out, did start to slowly list.

Salt Spring Island Coast

Salt Spring Island Coast

Right now, though, with the faceless potential killer of covid still with us, most owners want to sit tight. Where would they go? Salt Spring and the Gulf Islands offer the allure of safety, in their cohesive apartness. The arrival of consistent vaccinations may be the solution to this treading water time.

Still on Hold, Virtually

Meantime, March sings its way through our lives and the Gulf Islands are offering virtual reminders of their pleasures. Loved events will be on hold until next year, as the provincial government prohibition on gatherings continues. It’s interesting, that virtual connection. Neither good nor not good…just different.

Meantime, on Salt Spring, hike the Mt Erskine Trail, picnic at Ruckle Park, watch the floatplanes chortle in and out in Ganges Harbour, enjoy a coffee break on a patio or deck (many to choose from…try them all), sunset watch from Vesuvius Beach, kayak out to Chocolate Island beach, and always always follow the protocols and support local.

Salt Spring and the Gulf Islands swim enticingly in the Salish Sea. Their welcome is always there.

Market Analysis, August 2018, Salt Spring Island

August 2018, Salt Spring

The Mid-way Point

The first of August reminds us all that summer-summer is at the mid-way point.

Salt Spring Island

Salt Spring Island

Well, for those with school-age children that’s certainly the case…summer is over with the back-to-school ads.

The calendar, though, says summer ends on September 20th.

The real estate market on Salt Spring and the Southern Gulf Islands became a summer/fall market, some years back. Many sales take place between August and December. So…for real estate, summer and fall remain busy.

Sellers who panic when July folds into August need to remember that the main business on Salt Spring is just ramping up.

And what about that business? Thin inventory in any property type below one million is a fact. Prices have stabilized. There are both small bidding wars and back-up offers.

Although the market segment between one and three million is a slower paced sales pattern, that more affluent buyer also tends to turn up from August on. There is also a growing interest in estate style properties between 2 and 5 million (Canadian Dollars).

No matter the property type or the price point, the inventory is the thinnest I can remember, since 2003.

Salt Spring Islands Trust

Salt Spring is governed by the Islands Trust. This provincial body was formed in 1974, with the mandate “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. This cap on growth maintains a pleasing and community based lifestyle. A “yesteryear” experience coupled with everything required for a 21st Century life…a winning combination. It’s also a reminder of Economics 101: low supply coupled with high buyer demand create price increases.

Sellers and realtors do not create markets…buyers do that. The Gulf Islands were in an almost nine year downturn (late October, 2008 to mid-2016), as a result of the economic meltdowns of late 2008. Buyers vanished in those downturn years, and sellers lingered on the market…price reductions did not generate action. That was the classic buyer’s market (lots of listings and no buyers).

Now, we are in the classic seller’s market in the recreational/secondary home marketplace of the Gulf Islands: low inventory and lots of buyers. During the slow recovery of mid 2016 to late 2017, there was a sales volume increase in that entry level residential segment.

At the moment, as we start into August, most buyers are seeking residential options between 650,000 and 1.3 million. In waterfronts, we are seeing interest between one and three million. With the main part of our sales window still before us, there is an expectation that we may be looking towards significant price increases by 2019. If so, it will be based on continuing lack of inventory and the continuing return of buyer interest.

Government-Induced “Pauses”

There have been many government-induced “pauses” during the current slow market recovery. It is true that in all areas, city or rural, there is a lack of affordable housing and/or work rental options. Salt Spring struggles with this, too.

The current provincial government has turned to taxing an owner’s asset (their primary or secondary home) via severe taxation measures, in an attempt to create both affordable homes and a rental stock….this does not alleviate the problem. It may actually make things worse.

Vancouver is experiencing these taxation measures and the Lower Mainland market outcomes do affect the Gulf Islands. (The Gulf Islands are exempt from the vacancy tax, because they are part of the Islands Trust).

Yes, in 1974 the then provincial government capped growth on every Gulf Island…now, in 2018, we see the outcome of this 1974 decision…never a lot of listings and varying buyer desire patterns…it keeps choices lower and prices higher. In 2017, Salt Springers voted (63%) to retain the Trust, without change, as the form of governance.

Where do these buyers for the Gulf Islands come from? In the early 2000s, we saw a lot of buyers from Alberta and the U.S. After the economic crash of late 2008, this buyer profile disappeared.

The recovery that slowly began in 2016 was driven by Vancouver sellers. The Vancouver area still supplies most of the buyers on Salt Spring. This is why we pay attention to the real estate rhythms of Vancouver…those sellers have become our buyers. Any market cooling there will affect sales here.

Any questions about the changes to the Real Estate Services Act of B.C., which came into being on June 15? Call me.

Market Analysis, March 2018, Salt Spring Island

March 2018, Salt Spring

Salt Spring Island

Salt Spring Island

March…it brings with it “real Spring” (the one marked on the calendar), plus is the beginning of our main grid of sales activity.

Beginning of the Canadian Market Season

March Break to the Canadian Thanksgiving Weekend (mid-October) signals our “season” in our secondary home/discretionary/recreational region.

The busiest months are July, August, September, of course, and these months also encompass high tourist season, but holiday weekends in earlier months, and school holidays (March Break), begin the rhythms.

March is beginning with very little inventory for sale. High buyer demand (in the entry level residential segment) continued throughout January/February, in spite of weather hesitations. There may be some few new listings yet to come onstream, but there is much less choice for a buyer.

The definition of a buyer’s market: lots of listings and very few buyers. A seller’s market? Few listings and many buyers. This scenario often leads to higher list and sale prices.

Sellers and listing agents do not set markets. Buyers do that. Strong buyer demand and few purchase choices create rising values. The economic maxim of supply and demand is a real one.

There are always opportunities for a buyer in a seller’s market. If interested in a property, though, one must be prepared to act. Bidding wars are rare on a Gulf Island…but back-up offers do come into play.

How will new tax affect real estate market?

The new coalition provincial government raised the offshore purchase tax to 20%, at their February budget. It still applies to metro-Vancouver, but now will also apply to Victoria, to Nanaimo, and to Kelowna. For Salt Spring, many buyers are from Vancouver and the Lower Mainland. Will the tax create a hesitation in sales there, as the initial tax did in August, 2016? Those sellers in Vancouver have become many of our Island buyers.

The provincial government is stating that they are bringing in empty home taxes, in an effort to stop speculation…in their words: to stop people treating the housing market as a stock market. They tie this to the affordable housing crunch, which is a feature of all communities, but this also involves the B.C. Tenancy Act (many people choose not to rent their homes).

I write these market updates at the beginning of each month, and do updates via my blog, as the month proceeds. Check out my blog for March 1st. It gives the Vancouver Real Estate Board’s recap of the February Budget. There is some confusion right now, but the offshore purchase tax (at the moment) only applies to Vancouver, Victoria, Nanaimo, Kelowna.

Changes to the Real Estate Services Act of B.C.

Changes to the Real Estate Services Act of B.C. were meant to take place by March 15th. The government wasn’t ready with courses for realtors, or with new contract forms paperwork, for the proposed substantive changes. The date has now been set for June 15th. Until then, it’s business as usual.

2018 seems to be a time of change. For Salt Spring and the Southern Gulf Islands, locked into a form of governance from 1974 (Islands Trust), we might appear to be a time tunnel, but these beautiful islands are on the doorstep of major centres (Vancouver, Victoria, Seattle), and being slightly “apart” does not mean isolation.

It is now stated that all knowledge we possess right this minute will be replaced within 18 months. Hmmm…. The creative response of the artist may be needed more than ever.

Meantime, technological shifts are streaking right along, in our post-Internet world: crypto currencies, block chain investing, 3-D printers, robotics, artificial intelligence (will those machines out-think us?), driverless cars, smart homes, smart phones, online lives, meshed reality…. Hmmm….

1974 is beginning to sound pretty good? It still exists on the Gulf Islands…thanks to the Islands Trust. One can always go out to visit and sample the “always on” world and then come back home to your chosen island.

Are you seeking a Salt Spring Island or Gulf Islands property? Call me. Your best interests are my motivation. Benefit from my knowledge, expertise, and negotiation skills.

Salt Spring offers an authentic artists community, a temperate climate that sustains vineyards, olive groves, small holding farming, plus encourages appreciation of the preserved natural beauty. “Discover Yourself Here” is the tag line of the local Chamber…and it’s true.

Market Analysis, November 2017, Salt Spring Island

November 2017, Salt Spring

Salt Spring Island, November, 2017, Salt Spring

Salt Spring Island

There’s a total of 170 listed properties (November 2017, Salt Spring) at this moment (counting only residential of all types & undeveloped residentially zoned land of all types…not including commercial or industrial zoned listings).

In a “slow/downturn” market, there can be between 380 to 420 listings (residential and undeveloped lots/acreages).

The listing inventory, since mid-March 2016 to current date, has thinned out. Mid-March 2016 was the very first sign of a small recovery on Salt Spring, after the long 8 year downturn.

It was a very slow sales volume increase, however, between then & now, with several non-market driven “pauses”.

The 15% offshore tax in early August, 2016, for metro-Vancouver, for example, also completely stopped the secondary home regions recovery…those Vancouver sellers had become the buyers on Sunshine Coast, on Vancouver Island, and on Salt Spring Island. On Salt Spring, Aug/Sept/Oct, of 2016, were “lost”.

Then: “real winter” (between Dec 3 & May 15) struck: all over the Coast. Both tourism & real estate viewings on Salt Spring were dramatically slowed.

Almost a 9 month pause, then, between August 2016 & May 2017.

The Summer Market was 6 weeks late…it usually starts in last week of June, & did not kick in until July 15, 2017. There were pauses within the summer season, as well…due to smoke from both Interior & Washington State fires…again, affected the whole Coast, but also caused significant delays in Salt Spring activity.

That 6 weeks later scenario seemed to carry into the Fall Market, too. Perhaps October was really September!

August 2017 may also have seen a hesitation in activity due to the incorporation vote on Sept 9th…several people, on either side of the question, were waiting for the vote outcome. There was a lot of off island media coverage leading up to the vote. It may have caused a bit of a “digestion” pause throughout September. Difficult to track these kinds of hesitations.

All these fits and starts sales rhythms aside, the main sales on Salt Spring Island remain below 850,000.

November 2017, Salt Spring

To date, the sales are as follows, from January 1, 2017 to October 31, 2017:

  • 21 sales between 95,000 & 199,500.
  • 25 sales between 200,000 & 299,000.
  • 31 sales between 305,000 & 396,000.
  • 43 sales between 400,000 & 489,000.
  • 30 sales between 500,000 & 599,000.
  • 20 sales between 605,000 & 690,000.
  • 16 sales between 700,000 & 795,000.
  • 12 sales between 800,000 & 899,000.
  • 6 sales between 900,000 & 950,000.
  • 25 sales between Private Island Estate.
  • 4 sales between 2.2 and 2.5.

The sales between one & two million were either waterfronts (both ocean & lake) houses, or very large farms (20 to 104 acres), or large ocean view acreages/houses. The majority of them were waterfronts.

The sales over two million were waterfronts (3 ocean & one lake), with houses.

These sale price ranges in November 2017, Salt Spring, do not include price reductions…they are the completed sale price points. In some cases, in the over a million category, there were substantial reductions at the point of a sale.

What is the main buyer profile around Salt Spring Island?

The main buyer profile is still out of Vancouver/Lower Mainland. Alberta & U.S. (used to be 50% of our buyers) are still not in evidence. A smattering appear from Ontario, U.K., Europe…but they do not always focus on Salt Spring as a final destination choice. Most Vancouver buyers are seeking to buy down, if they have achieved a good sale price at their end.

It takes time to sell any property in all the secondary home markets, and this is true of Salt Spring, too. The first step is to choose “for” the Island…and then to choose for a property. It usually takes 2 visits (often 3), before a buyer acts on a specific property.

A showings pattern is about the buyer…not about sellers, or properties, or realtors. It just takes the time it takes. Time is a very significant element in every secondary home market transaction.

Properties still remain on the market here for lengthy timeframes, before capturing a sale. Price can sometimes be an allure factor…though not always.

So…here we are…in the closing weeks of a calendar year. Low inventory in all property types and prices. Sellers often achieving list price or close to it. Back up offers in place, if not small bidding wars. A sense that 2018 will see the beginning of serious price escalation, based on that thin inventory/buyer demand scenario.

Hmmm…it does appear that in November 2017, Salt Spring and the Southern Gulf Islands have returned to the buoyant times between 2002 and 2005. A nine year downturn now being followed by a nine year uptick? Stay tuned.

Market Analysis, May 2016, Salt Spring Island

Market Analysis, May 2016, Salt Spring Island

Market Recovery - Salt Spring Island

Salt Spring Island

Signs of a Seller’s Market Recovery

Yes, it’s really true…after an 8 year market downturn, we are finally seeing a resurgence of authentic activity in our secondary home/discretionary real estate market.

Many listings had followed the market down. Fine properties and well-marketed…but few buyers around. In a downmarket, buyers are scarce. In past five weeks, many of these long listed properties have now sold. Very few new listings are coming onstream to replace these steady “solds“…this is the sign of a seller’s market.

At the moment, it appears that sales volume has doubled over the same period as last year and that prices have stabilized (meaning that the buyers are having to offer close to or at list price to secure a property). Price rises and back-up offers may be next.

Salt Spring Island Ganges Harbour - Market Recovery

Salt Spring Island Ganges Harbour

Vancouver Origin

This authentic recovery is very new…began from one-day-to-the-next, approximately 5 weeks ago. Most buyers are from Vancouver. They have sold properties in Vancouver’s hot market, and are now seeking alternative places.

In late Fall of 2015, these property seekers were first looking on Sunshine Coast & in Okanagan communities.

Finally, it’s now the turn of Salt Spring, Gulf Islands, and Vancouver Island, to be considered as the new lifestyle choices.

The desire for a unique hard asset investment is strong again. The “safe haven” seeking may also be a part of sales in our beautiful coastal region. The natural rhythm of a market recovery…every 10 years there is an uptick?…is also a part of this return to a strong sales pattern. There is never just one reason for a market recovery.

Recoveries are never even-handed, especially when they first begin. There remain very pleasing properties at approachable prices. There are still opportunities for a buyer.

As residential offerings continue to thin out, it may be that an undeveloped land purchase will be in a buyer’s favour. Build a cottage, or barge on a home being saved from a city’s destruction, or consider a package home.

A renovation project on great land should always be considered.

Call me for ideas that work.

Creative financing can be a buyer’s friend in an upmarket trend.

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.