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August 2021, Salt Spring Island Market Analysis

August, The Market Segue

August begins the segue to the Fall Market.

At this very beginning of August, the listing inventory remains extraordinarily low. Unless they have to, most owners do not want to be sellers.

Buyers continue to remain interested in leaving the city and purchasing a rural lifestyle (the outcome of those covid shut-downs).

If they have sold a house, they are looking to buy a house. That said, to keep to a budget requirement, they may consider buying an undeveloped land offering. They might put up a guest cottage, or a modular home, or barge on an older home with Nickel Brothers, and renovate it.

Concerns over inflation and potential interest rate rises are also seemingly driving a hard asset investment purchase. This type of land-banking may be seen as a way to preserve capital.

Can I Work From Home & Live on the Gulf Islands?

Although lip-service was paid in past years to the idea that anyone could work from anywhere, because of the internet, this may not have been true in outlying areas. Now it is true. Another outcome of those covid shut-downs: the turn to online options. Suddenly, everyone is happy with Zoom meetings. Businesses and non-profits turned to online opportunities. Working from home is desired and possible.

Maybe we are now positioned at the very beginning of the “real 21st Century”? It will be interesting to see what’s in place at this time next year. Voids like to be filled. Now that everyone is able to be online, in some form or other, new ways to market, to connect, to “be”, will start to fill in. An exciting time? Yes!

Meantime, at this very beginning of August, we find 50 residential listings, not separating out homes, townhouses, waterfront, view, farm. Seven of these are strata townhomes that will not be built until next year.

  • 22 of these are listed between 420,000 and 998,000
  • There are 15 listings between 1,149,000 and 1,890,000
  • There are 8 listings between 2,125,000 and 2,995,000
  • One listing at 3,985,000
  • One listing at 4,488,000
  • One listing at 6,688,800
  • One listing at 11,975,000
  • Two listings at 14,000,000

There are 33 land listings, not separating out lots, acreages, view, waterfront, farm.

They are priced between 232,500 and 2,495,000.

  • There have been 189 “solds to date”, at this very beginning of August
  • 135 sales were below one million
  • 43 sales were between 1 and 2 million
  • Six sales were between 2 & 3 million
  • Two sales were between 3 and 4 million
  • Three sales were between 5 and 6 million

A Strong Sellers Market

It remains a strong sellers market. With the continuing low inventory in all property types & price points, there are both bidding wars in existing listings and asking price escalation in anything new to the market.

Real estate is a market, with the same dynamics as any other market driven economy. Buyers set the pace, not sellers or realtors. At this time, strong buyer desire is coupled with owners who do not want to be sellers…a recipe for continuing seller market conditions.

The Islands Trust & Inventory on Salt Spring Island

Salt Spring is a part of the Islands Trust, set in place by the provincial government in 1974. The non-growth policies of the Trust mean that there will always be limited inventory on any Gulf Island. This is beyond market trend.

So: the market speaks to buyer interest, causing diminishing inventory, on an island that has capped growth, through the Trust’s severe zoning/bylaw protections….hmmm….

More information on trends and listings? Call me! Let’s explore potential purchasing opportunities.

Thinking of selling? Discover my award-winning presentation that does encourage serious buyer interest.

Meanwhile…August. A time of fruition. Enjoy farmers markets, farm gate stands, special menus at our delicious restaurants, cider tastings, wine tastings…hiking/walking trails beckon…kayaking, paddle boarding, whale watching, sailing races…swimming in lakes and in the sea…shorter days mean earlier star watching (August brings annual meteor showers)….so much to see and to do…it’s still summer-summer. Enjoy!

Market Analysis, December 2018, Salt Spring Island

December 2018, Salt Spring

Here we are, starting into the last month of this haphazard 2018 market year.

The weeks between January 1 and February 20 did promise continuing brisk real estate sales…inventory was diminishing in residential offerings and prices had solidified…undeveloped lots/acreages were catching interest…higher end properties were being shown…and a seller’s market was in play.

Provincial Government Policies

The coalition provincial government brought in a budget (February 20) that specifically targeted Vancouver, Victoria, Nanaimo, and Kelowna…seeking to suppress the buoyant real estate markets in these areas. Several measures were introduced…the speculation (vacancy) tax being a key one.

Between February 20 and March 27, the Southern Gulf Islands/Salt Spring Island were included in the vacancy tax. The government used regional district boundaries to delineate where this tax would be applied. The government agreed that the Islands Trust (formed in 1974) had created a recreational ownership-resort based region and so all Gulf Islands were finally excluded.

Since the slow recovery on Salt Spring (began in mid-March 2016), inventory in place, due to the economic meltdowns of late 2008, had slowly cleared out. Fall 2017 & up to late February 2018 saw consistent sales and in all price ranges. Then the February 20 budget…..

Were the policies effective?

The point of the taxation measures applied to Vancouver was to suppress the real estate market…the theory being that prices would drop and affordability would rise. It might have been a better idea to open up opportunities for construction of affordable rental and purchase units. Sales did shut down in Vancouver, but affordability may not have been addressed.

Salt Spring, like other secondary home markets, is dependent on buyers from elsewhere. The recovery on Salt Spring, after the almost nine-year economic meltdown, was driven by Vancouver people who had sold in Vancouver…and were looking to relocate. The suppression in the Vancouver marketplace, after February 20, caused a corresponding pause in action on Salt Spring, for most of 2018.

Inventory still remains low. During spring/summer there were viewings. Fall saw more sales…not just showings. Sales were mainly below 800,000, and residential, not lots/acreages.

Visiting Salt Spring Island is the Key

Some projections are calling for a bounce back in the Vancouver marketplace by early spring, 2019. This is an unknown. What is known is that Salt Spring and the Gulf Islands are dependent on a buyer from elsewhere.

Before the economic downturn, the main buyers were from Alberta and the U.S. The 2016 beginnings of a recovery on the Islands came out of Vancouver. There may be an upcoming reappearance of Ontario buyers, looking for retirement destinations.

To Preserve & Protect

Although Salt Spring and the Southern Gulf Islands are beneficiaries of the Islands Trust’s mandate of “to preserve and protect”, which controlled growth through strict zoning/density bylaws, the Islands are not unaffected by changes and stresses globally. The Islands are affected also by the current provincial government’s various measures to suppress real estate markets elsewhere in B.C. Pauses in market cycles, no matter the cause, are always a feature…it’s never a straight line up or down.

Lack of inventory, however, seems to imply a buoyancy beneath these many government restrictive measures. Those measures, designed to suppress a real estate market, may be being digested. In the end, consumers set the pace. The guru projection advisors may be right about a resurgence in the Vancouver market, by early 2019. Hmmm….

So…at beginning of December, there were approximately 296 sales on Salt Spring, which can be broken down as follows:

Some Sales Data

  • 11 sales between 138,000 & 195,000
  • 14 sales between 207,000 & 290,000
  • 11 sales between 320,000 & 398,000
  • 22 sales between 405,000 & 492,500
  • 28 sales between 500,000 & 595,000
  • 24 sales between 600,000 & 686,000
  • 25 sales between 705,000 & 795,000
  • 18 sales between 800,000 & 898,000
  • 13 sales between 900,000 & 999,000
  • 25 sales between 1,005,000 & 1,950,000
  • 4 sales between 2,025,000 & 2,850,000

The above numbers relate to the sale figures…they do not show the tracking down of pricings, on the way to that sale figure. For example, a property selling at 730,000 was listed at 774,000. One listed at 2.8 sold for 2.383. Price reductions at the point of an offer can be quite common on listings over 800,000.

Over half the current listings (approximately 106 residential listings, between 309,900 & 4.8, and approximately 57 lots/acreages between 159,000 & 2.495) are priced over a million, if in the residential category. (In a “normal market”, listings might run between 380,000 & 425,000, in total). Listings are not plentiful right now…particularly if below 800,000.

If the water moratorium (put in place by 3 volunteers on the North Salt Spring Water District board) could be resolved, then 255 units (approved and funded), re affordable housing/work rental, could be built.

Those business enterprises that cannot find housing for proposed staff are also recognizing that vacation rentals are required. The visitors staying at airb&b are the buyers of their local products. Both types of rentals are needed in a secondary home/discretionary area, reliant on a tourist based economy.

Last Fall, the current provincial government canceled the fixed tenancy option on a lease, under B.C.’s Tenancy Act. In areas such as Salt Spring, this might be a reason for the reluctance to engage in a regular rental process.

The provincial government is in charge of Improvement Districts (water is under this jurisdiction). The government has transferred Improvement Districts to municipalities. Salt Spring is not a municipality. The CRD (Capital Regional District) would have to assume the Salt Spring water districts…or the unfortunate moratorium will not be resolved. There is no water shortage on Salt Spring. The issue is one of capture & distribution. The 255 ready to build affordable housing/work rental units await the outcome.

The changes to the Real Estate Services Act of B.C., enacted on June 15, 2018, are in place. Questions? Call me.

Celebrate!!!

December is a traditional time of celebrations. On Salt Spring there are many craft fairs (Beaver Point and Fulford Hall craft fairs, WinterCraft at Mahon Hall, pop-up events), plus ArtSpring presents seasonal music and theatre to enjoy. Volunteers create the Shop Local events clustered under the Christmas on Salt Spring label. Santa arrives twice: once by floatplane and later via a Carol Ship. The Village sparkles with Light Up. Lots to see and to enjoy.

Be re-inspired by your personal traditions…take time to remember others…take advantage of the fallow field moment of calm. That’s where the creativity lives.

Market Analysis, November 2018, Salt Spring Island

November 2018, Salt Spring

The Fall Real Estate Sales Season

November 2018, Market Analysis

The Fall real estate sales season separates into two parts: late summer/early Fall (end of August to mid-October) and late Fall (mid-October to early December).

Salt Spring is really a “seasonless” market…buyers turn up throughout the year, and sales from later in a calendar year can take place right into very early January of the following year.

Although tourism is most evident in late Spring/Summer months, and a successful visitor experience usually leads to a real estate purchase in our discretionary marketplace, the two don’t always occur at the same time.

It often takes two visits, if not three, for an interested potential buyer to decide to make an offer. There can be substantial time lags between visits…it can take one to two years to have a successful sales transaction, even in a buoyant real estate trend.

Where Do the Buyers Come From?

Buyers are not local. They look in other areas, too. It’s perhaps about “being sure” about the “where”.

Whether they live a ferry trip away or are a substantial flight distant, the buyer usually leaves some time between visits (a few weeks to several months). Their own lives come first and it just takes the time it takes to have a result in any secondary home/discretionary marketplace.

That said, we enter November 2018 with a continuing “thin” inventory of available listings.

Prices stabilized in Fall, 2017.

The provincial government’s February 20, 2018 budget included taxation measures to cool the Vancouver market.

These measures were also expanded to include Victoria, Nanaimo, and Kelowna.

Since mid-2016, Salt Spring has been chiefly dependent on Vancouver buyers. As a recipient marketplace, Salt Spring is affected by events in the areas where the buyers come from.

Anecdotally, it seems that people take around five months to get over anger at something and then to just get on with things. The lack of solid action between February 20 and September 15 has now been replaced with some increased activity. Hmmm….

The last two months of a year and the first two of the following year can be seen as a cohesive timeline.

A Market Trend for properties below 900,000

The market trend right now is showing most action in properties below 900,000. Over half the current listings are over one million. Will we see substantial price reductions at the point of an offer, in order for a transaction to proceed to completion? Will prices begin to suppress, to reflect those marked reductions now evident in Vancouver? Are we starting back into buyer’s market territory? Hmmm….

November 2018, Salt Spring Real Estate Market

Although there is a lovely sense of apartness to the Salt Spring lifestyle, no location is exempt from global issues. Currency concerns, tariff wars, prohibitive tax measures, etc…outcomes in countries around the world also end by impacting SSI. There’s that butterfly concept again.

Uncertainty is not good for any market. We began 2018 with a strong seller’s market underway. We are ending 2018 with the impacts of the coalition provincial government measures to suppress that Vancouver “hot market”. These measures, short term, have been successful.

At the same time, there does seem to be renewed interest out of Ontario (other provinces like to retire to coastal communities). Toronto does not have the tax suppression measures seen in Vancouver. That may augur well, going forward into 2019.

Albertans & US Buyers?

We are still not seeing Albertans or U.S. buyers. Before the economic meltdowns of late 2008, these two buyer profiles were 50% of our buyers. They were also seasonal. The Vancouver buyers want to live on Salt Spring. This may be why they take longer to choose the “where”. Salt Spring has competition from nearby Vancouver Island communities…why choose here? Why not there? Hmmm….

Late Fall-into-Winter season, a softer time for tourism, is also an opportunity. The fallow field moment allows for some creative thinking, to keep that Salt Spring allure in play. The outcomes of the “real” 21st Century are around us all…Salt Spring is not exempt from the profound technological changes that are now the surround sound of our lives. Yes…block chain technology is our present.

Initially, the Islands Trust, created by the provincial government in 1974, had the purpose of preserving the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents…the Trust capped growth and effectively created a park-like ambiance. Now, in our always-on, always-connected world, perhaps the real value of visiting and of living on Salt Spring Island is the ability to enjoy an experiential lifestyle…and not a mere searchable environment.

The Gift of Reality

The gift of reality…real reality, not virtual, not augmented…perhaps that’s the point of 1974 meeting up with 2018?

Markets are always a wave of up and down. Over time, an investment in real estate, in an area where growth is strongly controlled, where a community blueprint pays homage to 1974 concerns about over-growth, will become an enclave area…it will rise in value. Important, then, to always be thinking five years out.

At this moment in time, listings remain low, buyer interest is very present, and the allure of Salt Spring as a destination is high. Projections for early 2019, in areas that deliver buyers to Salt Spring, are about a bounce back in real estate dynamics. Hmmm….

Meantime, November unrolls before us: craft fairs (WinterCraft), Village galleries showcasing their artists, studio tours, continuing Farmers markets, theatre and dance and choral presentations at ArtSpring, hiking/walking trails beckon, and kayaking adventures and sailing races delight year-round.

There’s always lots to see and to do, on special Salt Spring Island.

Enjoy the softer season!

Market Analysis, September 2018, Salt Spring Island

September 2018, Salt Spring

The beginning of September…still technically summer, yet somehow accepted as early Fall. All those back to school memories, perhaps, signalling a season change?

The Fall Market in Gulf Islands real estate can be busy…September/October/November do see a lot of sales going through. Perhaps buyers looked earlier, but they often wait till early and late Fall to “act”.

Some Statistics …

As we start into September, on Salt Spring there are approximately:

126 residential offerings CURRENTLY LISTED:

  • 60 below 1 million (309,900 to 995,000)
  • 66 over 1 million (1,020,000 to 4.8 million)

There are approximately 90 lots/acreages CURRENTLY LISTED:

  • 79 of them between 159,000 and 995,000
  • 11 of them between 1,020,000 and 2,495,000

There have been approximately 145 SALES TO DATE

  • 124 of these sales ranged between 155,000 and 999,000 (with most of such sales coming in below 800,000)
  • There were approximately 21 sales between 1,005,000 and 2.85 (with most between 1,005,000 and 1.95.
  • Only two sales over two million (2.15 and 2.85)

Most sales above one million were waterfront properties. (The “solds to date” include residential and undeveloped land options).

Over half of Salt Spring’s residential zoned listings are priced over one million, while (to date) most sales are below 900,000.

Time to sell or buy? Are we in a balanced market?

The current coalition provincial government’s February 20th budget brought in several tax measures that were meant to cool “hot” real estate markets. Vancouver, Victoria, Nanaimo, Kelowna were specifically targeted by these measures.

For many Vancouver Island communities and Gulf Islands, including on Salt Spring, the main buyer profile for past 18 or so months has been a seller who had previously sold in Vancouver and was then seeking a new home location. The measures to halt Vancouver’s market have worked…and abruptly so. That primary residence market has softened markedly and Salt Spring’s recipient market has also softened in response.

Government intrusion, then, mainly targeting Vancouver, has also affected our local Salt Spring and Gulf Islands market.

Real estate boards like to call this kind of a slow down in action a “balanced market”.

A buyer’s market is characterized by many listings and few buyers. A seller’s market is about few listings and many buyers. This often leads to price stability, and then can lead to price escalation.

Is a balanced market somewhere in between, or is this just “realtor speak” to put a positive spin on a changing market? Too soon to say.

The late summer/fall market can be a busy sales window on the Gulf Islands. It has been this way for several years. If new listings don’t pop onto the market, and buyers consistently want to be here, then we will see many more sales as we go through to year end…low inventory, coupled with buyer desire, maintain a seller’s market.

I do this market report at the beginning of each month, and do updates via my regular blogs.

At this exact moment in time, the very beginning of September, it seems that there is a hesitancy afoot. It may be a momentary reaction to the B.C. government’s move to soften real estate markets…by late October, we will see if there have been further repercussions.

Sellers and buyers are disturbed, in Vancouver, about the measures to halt that market’s rhythm. Non-local buyers are reluctant to encounter the speculation (vacancy) tax, the offshore purchase tax (now 20%), and the extra schools tax for properties assessed over 3 million. The vacancy tax and schools tax apply to local owners, too. (Luckily, Salt Spring and all Gulf Islands were exempted from the speculation (vacancy) tax, on March 26th).

That pausing in the Vancouver primary residence marketplace has outcomes on Vancouver Island and on the Gulf Islands. Salt Spring is not immune to market forces in other areas.

Alberta and the U.S. buyers (once 50% of Salt Spring’s buyer profile, before the economic meltdown of 2008) have not reappeared. Vancouver remains the principal engine of activity in all coastal communities.

Harvest Time

This September/October will tell the tale of the 2018 market. We begin this new month, at this lovely harvest time of year, with thin inventory in all property categories/price points. Buyers are still around, but mainly seeking residential properties below 900,000. Will we see continuing clear out of inventory, perhaps at a slower pace, or will activity plateau due to the government intervention to suppress “hot” markets?

Hmmm…stay tuned.

Meantime, here we are, folding into the poet John Keat’s evocative description of Fall…“season of mists and mellow fruitfulness”. Many things are there to delight us on Salt Spring Island: Fall Fair, Farmers Markets, studio tours and gallery openings, Sip & Savour, harvest dinners in our great restaurants, craft fairs, Apple Fest, Canadian Thanksgiving…and there is much to be thankful for on this special Island. More info? Call me!

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, 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!