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Market Analysis, September 2016, Salt Spring Island

Salt Spring Island

Salt Spring Island

Beginning of the Fall Market

So…we begin the Fall Market…here it is, the beginning of September. The calendar says summer goes on till the 20th, but most of us see Labour Day Weekend as the “end”.

Sales volume in the Spring/early Summer market has gone up markedly on Salt Spring Island, in residential properties below $750,000. Over that price point, it remains softer.

In that entry-level residential segment, though, it could be described as sellers market conditions.

What does a seller’s market mean? Limited inventory plus strong buyer demand creates a seller’s market. Price escalation occurs with lack of product.

In a Gulf Island region, there is always a limited inventory

In a Gulf Island region, there is always a limited inventory. The Islands Trust, a provincial government body created in 1974, with the mandate to “preserve and protect” the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents, also effectively “capped” growth.

On Salt Spring Island

On Salt Spring Island

Growth in the Gulf Islands is controlled by strict zoning/density bylaws. On Salt Spring, commercial zoning is focused in both upper and seaside Ganges Villages, and they can’t expand beyond their boundaries. The small commercially zoned options at Vesuvius, Fulford, and Fernwood cannot expand. Home occupations are encouraged, but there are rules around these usages, too.

As soon as growth is limited, values do appreciate over time. Between 2002 and 2005, prices escalated by around 60% on Salt Spring. Then a pause developed in 2006 and 2007. Late 2008 delivered the global economic downturn, and secondary home/recreational areas (globally) saw a sharp fall-off in activity. Between early 2009 and early 2015, prices locally had reduced by around 45%.

Buyers who acted between 2013 (the “worst” year?) and late 2015, have benefitted by that dramatic levelling off of prices, in the secondary home markets. It’s difficult for people to act before clear signals of a market shift are in place…those who do act seem to have that “wolf’s sniff the wind” directional arrow.

Important always, though, to be looking down the highway and not in the rear view mirror…opportunity is ahead.

By late 2015, one could see an improving trend coming into play in the secondary home markets. The Sunshine Coast and the Okanagan saw renewed activity in the Fall of 2015. Early Spring brought action to Victoria and to some Vancouver Island communities. Mid-Spring delivered activity to the Gulf Islands. Salt Spring (perhaps because of its year-round lifestyle opportunities) usually shows market improvement first, among the Gulf Islands choices.

The interesting thing is the change in the buyer profile for Salt Spring and the Gulf Islands: almost 100% from Vancouver.

Traditionally, a Gulf Island buyer has come from Alberta (perhaps 20% of coastal buyers?) or from the U.S. (perhaps 30% of coastal purchasers?). This time, it’s buyers from Vancouver, who have sold during the extremely “hot” market there. They are seeking new areas to reside…not just recreational/seasonal buyers, thus.

These previously Vancouver based buyers will live here year round, and that has all sorts of good outcomes for the day to day business life on the Island. Shop Local becomes a viable item when there is a year round resident, and not just a seasonal impact.

Within the past 11 weeks, sales volume dramatically rose (perhaps tripled?) in the entry-level residential segment. On Salt Spring, that would be between 300,000 and 750,000. Low inventory with high buyer demand leads to price escalation. Couple that with an area with a no-growth policy (Islands Trust) and you can see that we may be returning to that 2002 to 2005 model.

Opportunity continues to exist in upper tier priced residential, in undeveloped lots and acreages, in recreational cottages/cabins, and in commercial options. These market segments have not yet seen the quick sales of the entry level priced residential properties. As these property categories start to sell (and they are slowly becoming more and more active), and inventory begins to thin out, price points will also stabilize/rise.

The sales stats to date break out as follows.

January 1 to August 28 “solds to date”:

  • 26 sales between 1 and 200,000.
  • 29 sales between 2 and 300,000.
  • 47 sales between 3 and 400,000.
  • 45 sales between 4 and 500,000.
  • 44 sales between 5 and 600,000.
  • 26 sales between 6 and 700,000.
  • 10 sales between 7 and 800,000.
  • 9 sales between 8 and 900,000
  • 5 sales. between 9 and 1 million.
  • 16 sales between 1 and 2 million.
  • 3 sales between 2 and 3 million.
  • 2 sales between 3 and 4 million.

There is always opportunity in any market trend. Creativity wins the day in a discretionary region. A buyer’s market means lots of inventory and few buyers. A seller’s market means little inventory and lots of buyers seeking.

January 2012, Salt Spring Island Market Analyses

January 2012, Salt Spring Island Market Analyses

Happy New Year!

I think many people will be glad to see the back of 2011…we may look back a few years from now and decide that 2011 was the key year in the societal shift that has been underway since 2000. Key in the sense that change erupted in all spheres & all at once…political, economic, societal, and personal…you name it, it will have changed, shifted, evolved, erased…and what about the newly created? 2011 seemed to be the year all elements conspired.

The economic downturn of October, 2008, global in its impact, broadened from the housing bubble to the banks and to Wall Street. Now it has further expanded to the geopolitical level. Nothing is exempt…the Arab Spring, the Eurozone meltdowns, the economy continuing to wallow in the doldrums, the power of the consumer of services restlessly angry…think about the now global Occupy Movement & the new Russian dissatisfaction with potentially rigged elections…plus wars & rumours of wars & unrest in Syria, Iran, Afghanistan, Pakistan, DR Congo…shift everywhere!

In change lies opportunity…well, yes, but the speed of change is the unknown. The internet’s binary rhythm (on/off, act/react) can occur in an eyelid’s blink. In the past, change was a much slower animal…in some cases, it was possible to think through a shift and to reposition.

Today, our technology has erased time, and instant responses are demanded. Flexibility has become an essential. Twitter’s immediacy gets data out there asap, and the reaction to it is just as immediate.

What about our editing function? Important to turn all that undifferentiated data into worthwhile information…what’s important/what not?

I like to save my projections till later in the month…so many trajectories underway: the uncertain outcome of the bid to save the euro world, the worry about the U.S. ability to restructure & move forward, the concern over outcomes in North Korea, the potential for unrest in China, the continuing dilemmas of terrorism & sectarian violence in Africa & in the Islamic world, and the potential for unrest in Russia. Important, I think, to digest the effects of the last quarter of 2011, and to see what the winds of change are blowing our way in the first quarter of 2012. Perhaps the real beginning to a new year is in early March?

Hmmm…the Chinese lunar new year is earlier this year, arriving at the close of this month, and heralding the Year of the Dragon. Sounding fiery?

Important at such moments of flux to remember what is important…to be thoughtful with our nearest & dearest, to be inclusive & remember those on their own or needing a helping hand, to take time to eat healthily, to walk that 15 minutes a day, to admire a beautiful day, to breathe deeply and to calm that rapid fear-based breath. Read more, less t.v. Move away from the virtual world and take five in the reality check zone. Learn something new…how about a foreign language? A humbling experience & a way to keep the mind active!

It’s the start of a New Year, with everything before us, second chances & new discoveries…let’s take five and accept the challenge.

Oh, yes…the real estate market…well, I think it’s hard asset investment time again, and that those who can will seek safe havens…both as a way to preserve capital and for personal safety/sustainability. Regions such as the Gulf Islands/Salt Spring Island and Vancouver Island will be on the shopping list. Inventory is medium, interest rates remain historically low, prices have reduced around 30 to 35 % between 2007 and now…sellers are highly motivated, allowing for further reductions at the point of an offer. An ideal time to be a buyer…. It may be that we are entering year seven of a seven to ten year cycle, and thus are already slowly on the way up…. Hmmm. Wish I could find where I put that crystal ball!

More information? Call me!

December, 2011, Salt Spring Island, BC

December, 2011.

The end of the year is a time to both look back, as a kind of summing up, with the benefit of hind-sight, and also a time to look forward, to dare a little, to make some projections.

The hind-sight part:

On looking back, it’s clear that entry level residential was the flavour of the month, IF a buyer could be encouraged to act. When I look at the “solds to date” info, for 2011, I can see that the bulk of the sales have been below $650,000. What doesn’t show on my “solds to date” info is the price reduction track…it only shows last list price plus the sold price. (Please call me for this definitive list…other solds info might be Board specific…mine shows the total sales picture).

The sales over $800,000 (few of them) tended to be waterfront options…many needing work to the dwellings…not move in ready…or, perhaps cottage/retreat, not “house” options.

In a down market, both fine oceanviews and undeveloped land options suffer.

When pricings come down by 30% (this is what appraisers surmise, between mid-2007 & present day), then the spread between fixer upper oceanfront and fine oceanview narrows. We are an island, and so the first choice is always oceanfront. Buyers will pick up a fixer-upper before they will view a state of the art oceanview option…ah, the water, the water!

The lack of interest in undeveloped land choices, no matter how delectable, even superb oceanfront options, is another indicator of a downmarket moment.

In a secondary home/discretionary marketplace (which describes Salt Spring Island & all Gulf Islands, plus Vancouver Island outside of core Victoria, the Sunshine Coast, & many of the B.C. Interior communities) no one “has to” buy anything…it’s all by choice, and the buyer is in control of the entire process, both the “where” and the “when” of all purchases.

In a downmarket, a buyer can put a second home, a recreational, a retirement choice “on hold”, thus.

An entry level price point purchase is either an opportunity for a local to buy (3 bed/2 bath home is the desire) or an investor looking for rental income might also act. It’s not necessarily an end user.

So, that’s the hind-sight view: for the past three years, the activity has been in entry level residential. The price of this has come up from $400,000 to $650,000, however, and this is a good sign.

No interest in undeveloped land (no one looking for a holding property, no one looking to build), no interest in businesses or in commercial/investment options, and little interest in the upper end residential pricings (any sales, and very few of them, saw huge price reductions at the point of the offer, even after significant price reductions en route to the sale)…typical scenario, then, of a downmarket syndrome in a discretionary area.

It seems to be widely agreed now that the U.S. Recession had begun in 2007. It’s also evident now that secondary home/discretionary areas, and globally so, had flattened in 2006. The Wall Street Journal, in January 2007, noted that all discretionary markets had become stable/inactive in 2006…meaning that inventory & pricing was stable & buyers were inactive. This inactive buyer scenario has been in place, in secondary home/resort based areas, from 2006 to present day.

Are we then in year six of a seven year cycle, and thus already on our way up?

Hmmm…wish someone could produce the crystal ball!

It is true that we are in a time of huge shift, and societally so. Economics is the pied piper, and the continuing geopolitical meltdowns continue. No business is exempt from the effects of the Internet, which has placed decisions in the consumer’s hand, and also has opened up the factor that someplace is now in competition with everyplace, re real estate options. It’s almost a given that if something “worked”, in business, even five years ago, it won’t now. No roadmap, then.

Downgrading of the U.S., Eurozone incipient collapses, the rise of China, the bailouts (money being printed?), earthquakes that cause economic loss as well as lives, severe weather problems, Arab Spring revolutions that upset 30 & 40 year patterns, the re-emergence of an autocratic Russia, etc etc etc…no place is exempt from the repercussions of change.

It used to be said that real estate was local…this is less and less true. The post-Internet world is the world of the meshed global village, and every place is affected and is in competition with every other place.

Different days!

The projection part?

Ah…now that is a daring thing to attempt, in this cloudy time of uncertainty. Would we call this moment the Age of Insecurity?

Let’s dare:

– if we are in year six of a seven year cycle then we should notice thinning inventory and increasing sales, perhaps by Spring, 2012.

– when inventory of good properties thins, and the buyer sees good value in buying real estate, most likely to preserve capital, then prices will start to rise.

– the sale of undeveloped land choices may signal this shift of market dynamics. If good residential inventory thins, then it makes better sense to seek land deals and to build, rather than to renovate severely a so-so option.

– with the continued bailouts, inflation may be the outcome to the past four years of maybe yes (inflation) / maybe no (deflation) debates. If so, buyers may choose discretionary real estate again, as that preservation of capital move…unique properties will be their quest.

– people may also look again at smaller communities, well apart from big city pressures…where sustainability is possible. The recent occupy movements, which crystalized diffuse anger, may encourage a seeking of a safe haven….

An aging population, a desire for a gentler lifestyle, a seeking of a location that offers the ability to enjoy the pleasures of life in the wired world of the 21st Century while still retaining the bliss of a “yesteryear” experience (of appeal to a young family), where all strata of a population and all demographics mingle…sounds a lot like a search for Salt Spring Island, or a nearby Southern Gulf Island…temperate climate, sustainable lifestyle, educational opportunities, rich cultural options, in the heart of the best protected boating waters in the world…it is special.

How may I help you to discover this lovely area? Benefit from my expertise and knowledge, of both inventory and of market trends. A full time and full service real estate agent, successfully connecting sellers with buyers, since 1989, I await your call.

How may I help you to buy your Salt Spring Island or Southern Gulf Island property?

November 2011, Salt Spring Island, BC

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November, 2011.

At this time of year, it’s a mix of settling into a softer season, with an emphasis on holiday celebrations, with family & friends, and also a time for business planning for the following year.

I often think of November, December, January as the “fallow field” moment…we drop inward, to the root level of our lives, the surface appearing quiet, not much happening, and yet below ground there’s all that prepping for the next phase…a “getting ready for the new” time.

It’s essential to look back, to take stock…an inventory check is always important. Then it’s a plan focused on going forward, encouraging new momentum, using what still works while creating new paths.

This is a very buoyant shift moment in time, with a technology explosion that continues to erase old business models…anyone of us is capable of rewriting the business plan in order to be creatively current.

A good idea, then, to use this fallow field segment in our year, to make sure we’re swimming in the pool of now, and not hanging onto past methodologies. That means making sure all our systems are proactively using technology and that we are also reconfiguring our systems to benefit the consumer.

The consumer is now enabled and is in control of information outcomes. It’s a pull forward concept, not a push out plan. Profound shift….

Global economic uncertainties abound, still. Perhaps the insecure scenario is the surround sound for our time…perhaps shift, instability, upheaval, change is the ground we now walk upon? Important, then, to remember to “flow”…trying to stop a flood means we’ll be swept under. “Go with the flow” was the old hippie ethic, and it’s one to remember.

A good idea to go for a 15 minute walk, every day, to experience physical movement in the natural world. At this time of year, where trees are stripped of leaves and nature is pared down to its essentials, we can be inspired to be thoughtful and so to catch at our particular pathway forward. This kind of rhythmic pause is a form of walking meditation, and may be helpful in awakening our editing function.

Easter Island Ahu Tongariki

Easter Island

In change lies opportunity. We need to be a little quieter so “our” opportunity can come forward…this fallow field moment at year’s end allows us to calm, and then to go forward, renewed. That’s when we will notice our individual opportunities.

Big picture concerns out there, of course…government bailouts, debt defaults, currency instability worries, societal breakdowns, deflation vs inflation arguments, and at the end of October, the seven billionth human was born. Food, water, a safe place to live, health care, education…the same needs to be met, for all of us. In Africa, the bulk of the population is under 16. Interesting….

So important, though, to practice peripheral vision, and not to fall into the tunnel vision encouraged by the “shout media”. Peripheral vision captures the creative response that leads to discovery and that is the pathway out of fear. A time of shift/change is unsettling…remember the mantra: go with the flow.

In this lovely Pacific Northwest Coast area, we are lucky to be surrounded by natural beauty, in a protected & still quite pristine region…remembering the attitude of gratitude is important at this time of year, too.

Looking to relocate to a Salt Spring Island or a Southern Gulf Island or Southern Vancouver Island property? Call me! Good choice of properties in all prices/types, continuing low interest rates, prices reduced substantially over the past three years, a very pleasing lifestyle opportunity…a time to step forward, as a buyer.

I look forward to sharing my knowledge, of both inventory and of market trends, with you…maps, information on all listed properties, links to professionals to advise on immigration & legal issues, a full service real estate experience, to benefit you. I look forward to helping you to discover this beautiful area!

How may I help you to buy your Gulf Island / Salt Spring Island property? Call me!

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Salt Spring Island: Arts, Music & History

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!