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November 2020, Salt Spring Island Market Analysis

I always think the calendar shift between seasons is a month out on the Pacific Northwest Coast. To me, November is the bringer of Winter.

Daylight Saving Time has returned to Standard Time, and the shorter days are with us. Temperatures cool. Rainy days that live up to the “wet coast” description come and go. Grey is the palette.

The continuing covid-19 restrictions (no large gatherings, social distancing, staying home if not feeling well, frequent hand-washing, sanitizer if not possible, wearing of masks in interior spaces) mean cancellation of loved seasonal events.

Online meetings, online shopping, online family and friends visits, online education, online medical, online legal advice….yes, it’s communication, but it’s very different from in-person meet-ups. It’s neither good nor not-good…it’s just different.

Marshall McLuhan, back in the 1970s, alerted us that “the medium is the message”. He was implying that our communication methods shape us. Is the online method making us observers instead of participants?

Meantime, lovely Salt Spring and the Gulf Islands continue to shimmer forward, and to remind us of the beauty of all seasons in this region.

View from Skywater in Salt Spring, British Columbia

Real estate? At the very start of November, we continue to experience thin inventory and buyer desire remains high. Prices appear to have stabilized, although there remain many reductions at the point of a sale.

137 residential listings

36 listings between 299,000 and 998,500
23 listings between 1,025,000 and 1,998,500
7 listings available between 2,000,000 and 2,700,000
One listing at 3,100,000
One listing at 5,900,000
One listing at 12,000,000
Two listings at 14,000,000

70 land listings

60 listings between 149,000 and 995,000
7 listings between 1,020,000 and 1,395,000
3 listings between 2,150,000 and 2,495,000

211 sales to date

157 sales between 120,000 and 998,000.
48 sales between 1,017,000 and 1,900,000
6 sales between 2,050,000 and 2,600,100

Price reductions were seen in most transactions at the point of the offer, and price reductions were also still taking place en route to that “last list price”, before the accepted offer.

About Salt Spring In the Winter?

Salt Spring and the Gulf Islands are secondary home markets. Buyers choose to come to Salt Spring and to the other Gulf Islands. No one “has to”. It still takes time, and two visits if not three, for that interested buyer to choose the “where”.

Buyers want to be sure, before committing to the specific island…it’s always a two-step dance. Choose the island and then decide on the property.

As good residential inventory cleans out, there is more interest in undeveloped land and a building project.

There are now many opportunities to showcase a property online. For several years, I have offered 3-D image rich plans and also video walk-throughs and drone videos. Now, these are just required items. Buyers, in spite of these specialty visual marketing options, are often asking realtors to do a face time walk through. Is the next step buying without an on site visit? Perhaps.

What is the Secondary Home Market Like in BC, Canada?

In past years, approximately 50 % of the buyers in the secondary home venues were from the U.S. and Alberta. The closing of the border back in March means no U.S. tourists and no potential buyers. Previously, U.S. & Albertans were recreational.

Since 2016, most buyers have been from Vancouver, and they plan to live in their new areas. This is another reason why it takes two (and often three) visits before choosing for Salt Spring or a Gulf Island…it’s that “being sure” thing, again.

November is the beginning of Winter here, regardless of what the calendar says. Yes, Salt Spring and the Gulf Islands enjoy that “cool Mediterranean” micro-climate and there are more sunny days/less rain than anywhere on the coast. Warmer, less rain, a temperate climate that allows for orchards, olive groves, vineyards, wineries, cideries, craft brewery…lucky us! Salt Spring offers a year-round lifestyle. Questions? Call me!

So…no large gatherings, cancellation of most seasonal events…a different kind of November, indeed, in the time of covid.

What’s Really Important?

Important to pay attention to what is there, right in front of us, to experience and to enjoy. Whether selling, buying, or resting in place, we are in a beautiful environment, with a soft climate, and no thing remains the same forever. When our new normal finally arrives, will we be ready?

That winter pasture, looking sere and lifeless on its surface, is busy at the root level…when Spring arrives that eruption of new growth is suddenly there. Right now is perhaps our “tending the roots” moment.

So: read a fat book, collate family recipes to gift on to younger generations, cook from scratch, light candles for dinner, be cosy by the fireplace, write your memoirs, be totally at ease in the online world (lots of tutorials to look to)…if that’s our surround sound, then let’s be fully immersed in it. Plant bulbs…be wonderfully surprised when they flower forward in February. Decorate for Christmas and give pleasure to others.

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

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, June 2018, Salt Spring Island

June 2018, Salt Spring

So…summer-summer is underway on the great Pacific Northwest Coast, and Salt Spring and the Southern Gulf Islands are a part of this alluring time of year.

June brings vacation seekers, the third annual Tour des Iles event (private boat links between the Southern Gulf Islands) at end of June is always fun, all the studios are open (pick up a map at the Visitor’s Centre), and the hiking/walking trails beckon. Kayaking, cycling, foodie markets (Saturday Market & Tuesday Market), artisans and artists on display, ArtCraft celebrates 20 years with its opening reception at Mahon Hall in mid-June, gallery openings/receptions in Ganges Village, continuing live music venues, farmgate stands..and the fun of Canada Day special events that segue into July.

Enjoy the natural world that has been preserved on all the Gulf Islands…since 1974, when the provincial government body known as the Islands Trust came into being.

It’s true that the property inventory available for sale is very “thin” right now. There are still buying opportunities…it might mean looking at undeveloped land and building your dream. There will always be less for sale on any Gulf Island due to the Trust’s “cap” on growth. A stronger real estate market is also a reason for the low inventory. Lack of product plus strong buyer desire does result in Sellers Market conditions. More info? Call me.

Big Changes Afoot in Real Estate Industry

Very big changes are afoot in the real estate industry as a whole. The first change will be on June 15. At that time, Limited Dual Agency will be deleted from the Real Estate Services Act.

In place since 1995, Limited Dual Agency allowed a real estate agent to act for both seller and buyer, in the same transaction, with the permission of both parties.

Going forward, after June 15, a listing agent cannot also represent a buyer for their own listing. Listing agents will then refer any buyers wanting to view that listing agent’s own listing to another realtor. Teams cannot refer to each other.

There are many more upcoming changes, but the 23,000 plus real estate agents in B.C. need to be retrained via continuing education courses, plus new contractual forms need to be created/printed, and “working with a realtor” information forms changed to reflect the new realities. The first significant change will be the deletion of Limited Dual Agency, on June 15. More info? Call me.

In change lies opportunity, of course.

Change also brings unexpected consequences.

One item I wonder about: many busy realtors do market their listings in print and digital media. In the past, they hoped to encounter a buyer looking for that kind of advertised property. All marketing is a significant expense, and is paid for by the realtor. If a listing realtor cannot deal with a buyer who answers that property ad, will that agent continue to spend dollars on such advertising? Will specialty print magazines and real estate supplements, reliant on listing agents property advertisements, go by the wayside? Hmmm….

Summer is a short season. The natural world flowers forward. Enjoy the calmer moments delivered by these longer days. What did Omar Kayham say? The bird is on the wing? Catch the vibe…it’s summer-summer. Enjoy!

Market Analysis, November 2017, 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, June 2016, Salt Spring Island

Seasonless Investment Opportunities

Here we are, entering what might be seen as the mid-point of our year.

Although in a way seasonless, with people visiting the Island and also seeking property investments, at any time throughout the year, the main grid of real estate sales action does fall between May 2016, Salt Spring Market Analysis and October 2015, Market Analysis.

Salt Spring Island

Here we are, entering what might be seen as the mid-point of our year.

June can be a quieter month, at least in the first weeks. Perhaps it’s because of the school “year end” activities, graduations, weddings, planning for summer vacations…there is often a brief “pause” in the first days of this month. By the last week, though, summer-summer is with us.

This is the Year

This is the year of an authentic market recovery (after an eight year downturn of huge proportions). It began, on Salt Spring & the Gulf Islands, about 9 weeks ago. Very new, then.

At the moment, the main sales have been in residential…and on Salt Spring mainly between 400,000 and 750,000. There are some few sales between 900,000 and 1.8 million.

Salt Spring Island

Slowly, slowly we are seeing an improving trend in Skywater Acres, Undeveloped Land Salt Spring Island, in upper tier priced residential, and in commercial options. The brisk sales in that 400 to 700,000 residential range have mainly been to buyers from Vancouver…most of them have sold to off-shore buyers, and are thus seeking their new lifestyle alternatives. Last Fall, they were buying on Sunshine Coast and in Okanagan. Then, their attention turned to this side of Georgia Strait. First, into Victoria…and now throughout Vancouver Island and the Gulf Islands.

Vancouver Residents Now Call Salt Spring Home!

The traditional buyer profile on Salt Spring and the Gulf Islands had been from Alberta, Canada and the U.S. Some few buyers from the U.K. and Europe…plus from Asia…and some retirees from Ontario. The Alberta and U.S. buyers have not currently been in evidence. This influx from Vancouver buyers is something new.

Things about our Trust You Should Know

The Gulf Islands form of governance is managed by the provincial government (Islands Trust). Two elected trustees every civic election. The Trust documents were put in place in 1974. Growth is strictly controlled by strong zoning/density bylaws. The CRD (Capital Regional District) also has an elected representative on Salt Spring.

The Trust’s mandate is “to preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. These restrictions effectively capped growth, and so there is always a thin inventory of properties for sale on the Gulf Islands, regardless of market trend in place. Finite inventory creates price escalation, over time.

Opportunities to Give Back

I notice that there is a strong volunteer spirit alive and well on Salt Spring Island. Volunteers have been behind: ArtSpring, Library, indoor pool, the pathways for pedestrians on main roads, trails in parks for hikers/walkers, etc. Lately, it’s been a fundraising effort to add a squash court to the indoor tennis building on the golf course property.

Kathy Reimer’s work to bring the fish back to spawn in the creeks on Salt Spring is an amazing example of the spirit of volunteerism. So many similar stories….

I think, when the boardwalk (sea walk? Harbour walk?) is completed, we should have a lovely curving stone wall there, one that would allow for “thank you plaques”…so many volunteers over the years who have contributed to the Salt Spring community. Time for a commemoration feature to thank them? Long overdue!

So, a pleasing and thoughtful and energetic community, in a scenically beautiful region, with a stellar marine environment, and with a limited amount of developable land (the rest is preserved in natural state)…hmmm…a recipe for property investment of a unique kind?

Markets have a rhythm. After that 8 year downturn, the local real estate market is on the uptick. Couple market action with the non-growth governance model and one can see why a Salt Spring or Gulf Island property purchase is at a higher price point than in some other areas.

There is always opportunity, regardless of market trend.

With low inventory, and high buyer demand, the result is always higher prices. In some price segments, we are already noting seller’s market conditions. Perhaps by late Fall, we will see this in all property categories.

A market is a wave pattern…crest, trough, crest…we appear to be on the way to a crest moment again.

Salt Spring Island: Arts, Music & History

Well done, Birgit Freybe Bateman! 70 photographs are crated and on their way to Russia (to the Stroganoff Palace
of the Russian Museum, to be exact). This retrospective of Birgit Bateman’s amazingly evocative and thoughtful photography is called: “Mindful Vision”. On Island, we’ve been lucky to view Birgit’s work at such presentations as ArtSpring’s “Photosynthesis” show. The “Mindful Vision” show will be seen during the peak tourist season, between July 2 and August 30.

Salt Spring Woodworks has had a name change: same location and same beautiful offerings, just a re-name to Duthie Gallery. A physical change to the gallery itself mirrors the name change. The evocative Summer Lights exhibit will be back in July/August, Thursday to Monday, 9 to 11 p. m. Currently, the gallery is open Friday, Saturday, Sunday, or by appointment.

Alan Gerber plays Moby’s tonight, a dinner music show, $12 cover charge, show at 8 p.m. It’s a WOW…wave if you see me!

Saturday, May 14th, it’s an opening reception at Starfish Gallery in Grace Point Square…featuring Susan Haigh and introducing Beverly Chicoine. Show runs from May 14 to June 4th.

Mark your calendars: Viva Voce performs at ArtSpring, Saturday, May 28th, 8 p.m., and Sunday, May 29th, 2 p.m. Conductor: Debbie Toole, accompanist: Chris Kodaly.

House concert, May 14th, with John and Michelle Law: folk, bluegrass, acoustic country. RSVP to 250-537-1059, plus ticket info.

ArtSpring benefit on Saturday night: Joy Kogawa will read from her lifetime of award-winning creative work, at ArtSpring Gallery. MC will be Briony Penn. The evening is presented by the Land Conservancy of B.C. Doors open at 6:30.

Tonight is a very important evening at Mahon Hall. The Salt Spring Arts Council‘s steering committee for a new arts school will present a distillation of recent community conversations at a wrap up session. Starts at 6:30…see you there!

Don Conley presents Back to Bach…the last presentation of Simply Organic, for the Spring season. Don will explore the development of the concerto form during the Baroque period, which was a time of flowering of emerging musical forms. Mark your calendar: May 18th, 10:10 a.m., at All Saints by the Sea. Lucky Islanders, to have this in our midst!

This Saturday, the Salt Spring Island branch of SPCA invites the community to an animal-themed day of fun. From noon to 4 p.m., at location below Gulf Islands Veterinary Clinic. Check this fund-raiser out!

Live music venues: Harbour House Hotel, Friday, Saturday, Sunday! Moby’s Oyster Bar (Alan Gerber tonight). Treehouse Cafe…tonight, catch Peter Prince. Friday, it’s the so talented Billie Woods. The 111 nights of live music (Music Under The Stars) begins in May 16th!

The Salt Spring Forum presents Maher Arar, at ArtSpring, May 21, at 7:30 p.m. He speaks on Democracy, Human Rights, and the Middle East. Call ArtSpring for ticket info.

Lots to see and to do…enjoy the Spring Season!

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