August? Already?

I know that the calendar says Summer turns into Fall on September 20, but we all know that Labour Day spells the end of summer-summer.

If you are only making plans for summer fun and ease just right now, then you need to get with the program…we’re at the half-way mark.

The ten week interruption (mid-March to mid-June) of the covid-19 virus closures, plus the Juneuary and early Julyuary cool and wet weather pattern, may be reasons for a late start in one’s mind-set.

When does the summer come to Pacific Northwest Coast?

Mid-July finally brought real summer to the entire Pacific Northwest Coast, and that includes on Salt Spring and the Southern Gulf Islands. Beauty everywhere!

Should I move to the Gulf Islands?

Real estate sales in all secondary home/rural regions have been brisk, including on Salt Spring, since June 12th. That 10 week shut-down resulted in city residents desiring to make a rural move…a rewriting of a life script appears to be underway.

Most buyers are still from Vancouver…they sell there and then check out all the smaller “apart” regions: Sunshine Coast, Vancouver Island, Gulf Islands, Okanagan/Interior communities. They are looking for a house…undeveloped land and cabin/cottage options are still slower to catch this buyer.

Is buying land a hedge against inflation?

That said, there is starting to be what I term a “land banking” feature. These buyers are seeking solid hard asset investments, and land is one such opportunity. The fear may be that we will see serious inflation, perhaps even a rewrite of currencies, as a result of the massive amounts of government pay-outs during the covid-19 closures. Real estate in regions that are alluring and where it’s difficult to create more inventory capture this kind of attention. (Ask me about the Islands Trust and its cap on growth, since 1974).

Many things are already new since mid-March…the recovery (we are still in “the middle” of the pandemic outcomes) will not look like the pre-virus days. Education, retail, real estate, investing, medical, legal…these are all just some of the areas that are already using the online communication options. (Don’t you wish you had stock in plexiglass, medical masks, and “zoom”?).

Real Estate sales in B.C. during COVID-19

At this very beginning of August, then, there are approximately 79 residential listings.

• 34 of these are between 497,000 and 998,000.
• 30 are listed between 1,020,000 and 1,795,000
• Two listings are between 3,179,000 and 3,200,000
• 0ne listing is at 6,688,800 and one at 12 million.

There are approximately 71 land listings at this beginning of August:

• 62 of these are between 198,500 and 995,000.
• Five are listed between 1,020,000 and 1,150,000.
• One is listed at 1,295,000.
• Another is listed at 2,150,000 and another at 2,495,000.

There are currently 12 commercial properties listed…some business only and others land & business. Call me on these!

There have been 113 “solds to date”.

• Two of these are between 156,000 & 190,000
• Six are between 219,000 and 265,000
• Six are between 300,000 and 390,000
• Twelve are between 401,000 and 499,900
• Fourteen sold between 500,000 and 599,000
• Twenty-one sold between 600,000 and 694,500
• Fifteen sold between 715,000 and 789,000.
• Six sold between 809,000 and 882,000
• Six sold between 933,000 and 998,800

Twenty-two sold between 1,035,000 and 1,900,000 (the majority of these were below 1,449,000). Three properties sold between 2,195,000 and 2,600,100. There are viewings and some sales in the residential luxury segment, but most residential transactions are still below mid-800,000 range. Nothing comes on to take the place of these “solds” and so inventory continues to be extremely low. In properties between 500,000 and 600,000, residential offerings don’t last long on market…even when serious renovations might be required.

Land sales traditionally strengthen when residential becomes exceptionally low. Hmmmm…..

As entry level pricings slowly inch up, based on low inventory and high buyer demand, then we truly are in sellers market conditions. Buyers must make their highest and best offers right away. In this kind of low inventory/high demand moment, it’s not possible for a buyer to try to negotiate their way to a final price. In properties listed below 850,000, supply is low and demand is high. Sellers are in control of the process in such a market trend.

August…a time of fruition

Traditionally, many of the higher end priced residential properties catch most sales interest between end of July and into early November. Several years ago, we became a late summer/early fall market. In spite of covid interruptions, the traditional outcomes seem to be underway. The big difference created by covid-19 is that city dwellers are desiring country opportunities. The secondary home markets turn? I think so!

August…a time of fruition, a time to enjoy the Tuesday Farmers Market fresh veggies and berries and orchard offerings. Time to meander the artists works at Artcraft, at ArtSpring, at a covid-style Saturday Market. Time to enjoy decks and patios around the town, for dining out and coffee stops along the way. Enjoy the live music presentations! Sailing, kayaking, swimming in lakes and from ocean beaches, sunset viewing and star watching…summer pleasures are not complicated…they are about ease and the gift of time…taking time…remembering the power of daydreaming and observing the fullness of the natural world.

Summer-summer…. Welcome August!

Is it time to cast off now? To get going?

Between March 12th and May 19th, Salt Spring Island and the Gulf Islands were shut down, along with all B.C. communities, as the province responded to the government’s “stay home/social distance” edicts. Everywhere, only essential services were allowed to be open and social distancing/sanitizing were always required.

The flattening of the curve of the Covid-19 virus has completely changed the terrain of our secondary home regions.

On Salt Spring, events/gatherings involving large groups were cancelled (Home & Garden Show, Round Salt Spring Sailing Race, ArtCraft, ArtSpring, indoor pool, Saturday Market, Canada Day, Fall Fair, Sip & Savour, and so on). Schools were closed. Accommodations closed. Parks were closed.

B.C. Ferries cancelled some routes and cut sailings on others on April 4th. Flights were on hold for floatplanes, until May 4th. Potential visitors to recreational communities, including Salt Spring, were asked to stay away, and, if owned a second home, not to go to their cottages.

Slowly, some soft re-openings occurred in early May…the government had targeted May 19th as the beginning of mainstream business re-openings. Continued social distancing and sanitizing protocols were required by all businesses. Numbers of customers in a space at any one time were also being strictly controlled.

All aspects of communication were forced to be online, during the eight week closures. By mid-May, federal, provincial, and local governance groups were discussing what the “new normal” might be like and recovery/resiliency measures were being planned…all via Zoom.

The Before: pre-March 12. The Middle: still going on. The After? Not yet clear.

Does seasonal tourism affect real estate on the Gulf Islands?

In seasonal tourism based economies (such as on Salt Spring Island and the Gulf Islands), to lose the traditional business opportunity of March Break to Canadian Thanksgiving Weekend (mid-October) is devastating. Some businesses have been able to pivot to online sales models, but not all are set up to do this. Some may not reopen. The Canadian government projects that 30% of businesses will disappear. How will this affect Ganges Village?

What was the outcome for real estate sales? Most buyers for Salt Spring properties still continue to come from Vancouver/Lower Mainland. Sellers there become buyers in the secondary home/rural areas.

The Vancouver market began to improve around September/October 2019, after two years of slump due to interruptive provincial government taxation measures to suppress busy city markets. Salt Spring experienced a follow-on increase in sales by November, 2019.

Between November and early March, 2020, the island was experiencing low inventory, buyer desire, stable prices, and seemed poised to have sellers market conditions in place. The March Break season opener beckoned. Then: Covid-19 virus arrived and complete shut-downs throughout B.C., by March 12th.

There has been no sudden inventory increase, since the pandemic closures. Prices have remained stable. Inquiries (online) during the shut-down were serious and substantial. May 19th was seen as the slow beginning of potential physical viewings, as government relaxed its “stay at home” measures.

Some predictions / projections

The latter part of May did see people arriving to view, often on a day trip, and some offers were being made. With few listings, buyers were quick to act on anything that caught their eye…most options receiving offers were still listed below a million, but a few higher priced properties, even some that had been listed for several years, were suddenly seeing action.

The real estate board updates about less sales in April/May simply reflected the enforced pauses in activity. These board reports also noted few listings for a buyer to consider, and so stability in pricings remained.

Some are forecasting serious house price reductions across Canada, as a result of the pandemic closures…it is true that people who have lost jobs and cannot meet their expenses will put their hopes for housing on hold. Current events are so without precedent, though, that one can argue many scenario outcomes.

Another scenario is that people able to work from home may be seeking suburban and rural opportunities. Time will decide the outcomes. It may be that buyers from out of country, disturbed by global unrest, will ignore the current 20% offshore purchase tax in Vancouver and buy now. Vancouver sellers become the buyers in secondary home areas.

Projections right now are calling for all secondary home markets to see an increase in viewings (required distancing protocols in place) with potential resulting sales between mid-June and end of September. City dwellers may truly be seeking a move to authentic rural areas, with opportunities to garden/to be self-sufficient, to be less crowded. Hmmm…..the country mouse lifestyle might now be attractive to the city mouse.

Salt Spring Market Conditions during COVID-19?

At this very beginning of June, then, there are 74 residential properties for sale on Salt Spring.

Townhomes, waterfronts, acreages are not separated out.

• 38 of these are listed between 339,000 and 999,800.
• There are 24 properties listed between 1,079,000 and 1,795,000.
• There are 10 listings between 2,000,000 and 2,999,900.
• There is one residential listing at 3,179,000 and an 84 acre farm at 6,688,900.

At the very beginning of June, there are 70 undeveloped land properties for sale, not separating out lots, acreages, waterfronts.

At the beginning of June, there have been 59 “solds to date”.

• Of these, 45 sold between 156,000 and 980,000
• 13 sales took place between 1,057,325 and 1,900,000.
• One sale took place at 2,395,000.

In almost every case, a reduction took place at the point of the offer/sale

Most sales took place before mid-March, but a handful did occur in April/May. In most cases, those buyers had been looking at Salt Spring and the Gulf Islands earlier, and so were not “new business”…they had just decided to act.

Interest Rates Low

Interest rates have remained exceptionally low. Although there are not a lot of listings (as soon as you put in price and type, you see this), there are good ones and a buyer is a valued part of a transaction…no matter the trend in place, a decision to purchase on Salt Spring is always a choice, and sellers do listen to serious offers. If an owner wants to be a seller, this is also a good time…low inventory means less competition.

Where to market Salt Spring Listings?

Marketing opportunities will quickly change/amplify, as the totally online world supplants previous options. Although important, the MLS is now only one vehicle of online property presentation. Print real estate supplements may not survive.

It’s interesting about the internet influence…it can make a property look very different from its reality…it can leave potential negatives out of the frame…it can generate a viewing and then lose the consumer’s interest by not delivering on the online promise. It’s important to encourage a viewing, yet it’s also necessary to reflect reality in an online marketing presence. Consumers will want to see physically what they observed online. This may be especially true in rural areas.

As we get to the After, everything will be different. Is that a threat or a promise?

June is the half-way point in a year.. The months of January/February/first of March 2020 clearly belong to a different time. The pause period (mid-March to the end of May) erased earlier expectations. Now, June to late September, if the flattening of the Covid-19 virus continues successfully in B.C., may turn out to be the main sales window for Salt Spring Island and the Gulf Islands.

Buyer’s or Seller’s Market?

It will depend on the consumer’s desire to act. Will they travel? Will they want to look at properties? Will the seller allow viewings on a first visit, or will they insist on exterior viewings only the first time? There is no one way to forecast the pattern of a reopening in a pandemic time.

There is both desire and hesitation on the part of a buyer. How will that play out? And what about all those government pay-outs to maintain a population? Will the government re-work the currency to offset the debt? Might this current flurry of interest in real estate in some areas reflect people’s concern about the ongoing value of cash?

Beauty on the Gulf Islands

Meanwhile, June: blossoms are evolving into apples, pears, plums, nuts, berries, grapes, olives…produce from gardens and orchards and farms are on display at farm gate stands and at farmers markets. The longest day of the year is at hand. The sea invites exploration by sail, power, kayak, paddle board. Parks are open again. Beauty is everywhere on the Pacific Northwest Coast and the Southern Gulf Islands/Salt Spring Island invite one to enjoy this explosion of Nature’s best.

June. It’s a lovely hiatus month, between two real estate market moments: it straddles early Spring and Summer market patterns.

June also welcomes graduations, weddings, school’s out/summer holidays enthusiasm, and, on the great Pacific Northwest Coast, it can often be a showery weather month.

Gardens are in full array, roses are at their abundant bloom best, farmers markets, vineyard tastings…the opulence of Salt Spring’s rural heritage surrounds us.

Upper Tier & Entry Level Activity

At this hiatus moment, between two real estate sales patterns, it’s evident that entry level priced properties were where the action was in our short (due to weather vagaries between December 20 and end of March) early Spring cycle.

The upper tier priced properties don’t usually begin to see activity until after the Victoria Day Holiday Weekend, in mid-May.

Between mid-May and end of October, our real “season” takes place…and it invites buyers, in all price ranges and seeking all property types, to come forward to view.

Listing Inventory

The listing inventory remains very thin. We are seeing price reductions, but are also seeing that the very few new listings coming onstream are at higher price points than would have been the case in the previous year. Everything on the table at once means we are in a transition market…with an apparent upward momentum. Few listings, coupled with buyer desire, can lead to price increases. This outcome may not be evident until mid to late August.

I do this market update at the beginning of a month. June can have a “pause” in the first two weeks. Perhaps it’s about those family celebrations, but it might also be that late June begins summer travels and so early June is calmer.

At the beginning of June, then, we have 124 residential listings on the market. This does not separate out townhomes or waterfronts…it’s just residential/dwellings listings. There are 79 lots/acreages on the market. There have been 60 “solds to date”.

This is an extremely low listing inventory, particularly in the entry level priced categories. Most sales remain in that entry level price segment.

Of the 124 residential listings, at beginning of June

• 12 under 500,000
• 10 were under 700,000
• 19 were under 800,000
• 18 were listed below 900,000
• 7 listings were under 1,000,000
• 40 listings between 1 & 2,000,000
• 12 listings between 2 & 3,000,000
• 5 listings are between 3 & 4,000,000

Of the 79 lots/acreages, without separating out waterfronts, at beginning of June

• 27 were listed under 300,000
• 20 listed below 500,000
• 16 were listed below 600,000
• 10 were below 1,000,000
• 6 were listed between 1,020,000 and 2,495,000

Of the 60 “solds to date”

• 28 were below 600,000
• 12 sales below 800,000
• 10 sales were below 1,000,000
• 10 sales between 1,000,000 and 1,700,000

Patience in the Secondary Home Markets. Invaluable

Patience is a part of all sales in all secondary home markets. A decision to buy is a choice…no one “has to” move to Salt Spring. In deciding about that choice, there are always time lags. Buyers do look in competing areas, “just to be sure”. It can take three visits before a decision is made.

Obstacles Can Play a Role

There are always issues facing all communities: for Salt Spring, the lack of affordable housing/work rental is also a problem. There are three public (and one private) affordable housing/rental options that are funded and permitted and they cannot go ahead because of the water moratorium.

Brought in by the three volunteer board members of NSSWD (North Salt Spring Water District) in 2014/15, this effectively prohibited connections to the water systems. There may be a capture/distribution issue on Salt Spring, but there is not a water shortage issue.

Water is under Improvement Districts at the provincial government level. The government has off-loaded Improvement Districts onto municipalities. Salt Spring is not a municipality…it is part of the Islands Trust. The CRD (Capital Regional District) out of Victoria could assume the NSSWD, but has not done so.

The lack of work rental options led to the Trust bylaw enforcement officer shutting down airb&b/short term vacation rental options (STVR). This was done under the assumption that vacation rental landlords would then rent to regular annual tenants. This is the Trust response to lack of work rentals.

The lack of people wanting to rent to regular tenants has to do with the current provincial government’s change to the B.C. Tenancy Act. The government canceled the Fixed Tenancy option, in Fall, 2017. This is why people do not want to be landlords to regular tenants…unless the owner moves in, one cannot give notice to a tenant.

Underlying Issue

The underlying issue, lack of affordable housing/work rental, gets back to the volunteer driven NSSWD moratorium on connecting to water systems. In our non-municipal form of governance, there is a lack of proactive oversight.

Summer Begins!!!

Meantime, the summer-summer season begins with June…and visitors to Salt Spring generate the economic well being of business enterprises. Check with the Salt Spring Chamber of Commerce for more information.

So, lovely June is upon us. Time to dine al fresco on restaurant decks and patios, to enjoy live music venues (Treehouse Cafe, Moby’s, Woodley’s), to meander Ruckle Park trails, to go jump in the lake (St Mary’s, Cusheon, Weston, Stowell) and swim to your heart’s content, to paddle board off Vesuvius, to kayak to Chocolate Beach, to enjoy Saturday and Tuesday Markets, to simply “be”, and to definitely stop and smell those roses.

Seeking a real estate outcome on delectable Salt Spring Island? No matter the market trend in play at any given time, there is usually a way to make things work. Call me! Let’s discuss. Your best interests are my motivation.