Tag Archives: market analysis

September 2015, Market Analysis

September 2015, Market Analysis

Salt Spring Island, 2015

Salt Spring Island, 2015


Real estate is always a sure-fire conversation starter. “What’s the market doing?” is a classic opener.

For those who have been holding secondary homes/recreational properties, during an almost eight year downturn, it’s welcome news indeed that the answer is now “Definitely improving!”.

All markets are cyclical in nature

All markets are cyclical in nature. Sellers would prefer to sell on a high, and buyers would love to buy on a low. Recognizing pivotal market trends is a tough call. It’s usual to understand things when they have already passed by…easier to enjoy that 20/20 vision of the past.

The recreational markets are particularly difficult to call. Unlike a primary residence/city marketplace, where one lives year-round, works there, sends children to school there, the secondary home/rural marketplaces are by choice areas.

Old Scott Road

Old Scott Road

No one “has to” buy a property on a Gulf Island or in a rural community on Vancouver Island. Such a decision is totally discretionary, and does require consumer confidence in economic outcomes.

The post-Internet world we all now inhabit has changed the fabric of recreational ownership. It’s probable that 100% of such purchases start with an Internet search, and possibly that start occurs a good two years before a purchase is even seriously entertained.

That internet search puts all recreational regions on the same level. The buyer is no longer specifically targeted to one area… all such regions are now in competition with each other. Choice is huge.

The difficulty with several evenly weighted choices is that the viewer of same may put off acting. A buyer wants to “be sure”, before choosing. Why this place? What about that one? How to decide? Too many choices may mean no decision is taken.

I often think that a happy visitor experience in a recreational area can lead to a real estate purchase there. Successful tourism outcomes seem to drive all secondary home economies.

So…tourist discoveries are apparently showing their best patterns since 2007. Real estate sales volume in rural/recreational regions has improved dramatically. We may be just at the beginning of a market trending upward, in such discretionary areas. This might be the brief equilibrium moment between a buyers and a sellers market.

The allure factor that encourages a discretionary property decision might be the opportunity to live, even part-time, in a kinder gentler place. To be self-sufficient. To remember our essential selves.

August 2015, Market Analysis

August 2015, Market Analysis

August on coastal B.C. is an alluring season…& this summer of sun & warmer than usual temperatures is calling forth visitor experiences throughout this beautiful region.

Salt Spring Inn

Salt Spring Inn


I’ve always thought that tourism leads to real estate sales in all secondary home/discretionary areas. During the 7 to 8 year “downturn”, tourist visits were also down.

Most businesses in discretionary regions are once again seeing good economic outcomes this season…many owners feel that things have returned to 2007 levels.

Real estate sales volume has doubled in most secondary home/by choice markets, in that entry level priced residential category.

Price Stabilization

Gulf Islands Hotel

Gulf Islands Hotel

Along with higher sales volume, there is thinning inventory in this same price segment. That usually leads to price stabilization & potential for price increases.

The upper tier priced residential market segment is seeing random sales again. Yes, prices are markedly lower than list, which may have seen several reductions if followed market down, but sales are slowly occurring.

Undeveloped land sales are also beginning to strengthen. Commercial opportunities are slowly catching attention. Both of these property categories are dependent on renewed buyer confidence.

While prices may not yet have stabilized to the point that definite patterns are in evidence, it is clear that the spread between list & sale pricing is rapidly narrowing, & in favour of the seller.

Late 2014 saw the beginning of consistent sales in that entry level residential category &, by late Spring 2015, this segment was seeing the transaction equation swinging to the seller side re sale pricings.

We seem to have become a summer/fall market now, in the Pacific Northwest coastal communities…whether the Gulf Islands, or Vancouver Island, or the Sunshine Coast. It’s important to be “out there“, if a seller, & year round (the buyer profile is mainly non-local in the discretionary areas), so that one is “discovered” & will bring the buyer to eventually choose…physicality, though, does seem to occur more frequently in summer & fall months.

We appear to be at a mid-point in a real estate recovery. Sales volume increases, stabilizing prices, renewed interest from buyers in holding second home/recreational property options…it all points the way to an authentic market recovery in all the secondary home markets.

Our low Canadian Dollar against the Pound & the U.S. Dollar may bring back that traditional buyer to our area. A “safe haven” seeking may be playing a part in showcasing our region as a viable destination choice. Our temperate climate does encourage self-sufficient outcomes.

How lucky we are to call this region “home”.

June & July 2015, Market Analysis

June & July 2015, Market Analysis

Well…here we are…it’s the month when the calendar spells Summer…& the great Pacific Northwest Coast erupts into lush beauty.

Salt Spring Island and the Southern Gulf Islands are nestled in the heart of the very best protected boating waters in the world…and summer-summer is the premier season of all.

Sailing, kayaking, power boat discoveries…fishing…hiking, walking, climbing…farm gate stalls & farmers markets pleasures…galleries, studio tours, theatre, dance, live music venues around the town…spas, alternative health explorations, meditative & restorative experiences…it is all here, for your enjoyment, on special Salt Spring Island.

Salt Spring Island

Salt Spring Island

I often think that real estate sales mirror visitor arrivals, & so the importance of tourism cannot be ignored in any secondary home/discretionary area.

One visits, falls in love, calls a realtor, & then everyone else gets busy: designers, architects, contractors, soft furnishing providers, painters, excavators, septic installers, well drillers, landscapers, gardeners, galleries, food providers, restaurants…you name it…it starts with tourism (which also initially benefits restaurants, hotel, motel, resorts, B&B providers, car and scooter rentals…boat & kayak rentals, fishing charters, whale watching tours…vineyard wine tastings, farmers markets)…you get the drift.

Salt Spring Island

Salt Spring Island

The main industry on Salt Spring & the Gulf Islands is tourism…and all businesses benefit, whether at the front end or the back end.

The good news?

Visitors are back. Travel to the coastal regions is experiencing a resurgence. And the real estate markets are also on the “improve” side of the equation in all the “by choice” marketplaces. That includes on Salt Spring Island & the Gulf Islands.

A real estate recovery always starts in the entry level residential category. As sales volume increases and inventory “thins”, in this beginning property segment, then either the buyer has to raise the expectation level price-wise, or has to buy inexpensive raw land and build a cottage or move on a modular, to stay on budget. This is another strong sign, the sale of raw land parcels, of an authentic improving real estate market trend.

Many sellers on the Gulf Islands & on Vancouver Island, in the past 5 years, had wondered why the very brisk sales in 4 key neighborhoods of Vancouver had not spilled over onto our side of Georgia Strait.

Well, it’s the great divide between a city/primary residence market and a rural/secondary home marketplace. Totally different dynamics are in play.

In a downmarket, buyers can put a purchase in a discretionary market “on hold”… and indeed, this inaction on the part of buyers characterized the past 7 to 8 years on Salt Spring & the Gulf Islands. Same story on Vancouver Island & on the Sunshine Coast.

Similar statistics in Whistler & in B.C. Interior communities…no one has to retire or choose a softer lifestyle or purchase a recreational/second property for summer/weekends use…one needs a level of economic confidence to consider such “extra” property options.

Now however, (after 7 to 8 years of inaction from buyers) activity has begun…and soon it will be in evidence in all property types and price ranges, in all these recreational/retirement venues.

Salt Spring and the Gulf Islands are very different from small coastal towns on Vancouver Island & on the Sunshine Coast. The Gulf Islands are a part of the Islands Trust, a government body that was created in 1974, to preserve & protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents. Salt Spring is not a municipality.

The two trustees & the CRD representative (elected positions) are the form of governance…the restrictive zonings/bylaws, put in place in 1974, to severely control growth, remain in effect.

I think the lovely things of value on the Island have been created by volunteers: ArtSpring, Trail & Nature Club, Island Natural Growers, the Rainbow indoor pool, the Library, the pathways linking the Villages, various clubs & organizations, etc)…all the positive outcomes to benefit the community are the result of volunteers, and their fundraising efforts. Wow! An entrepreneurial & generous community, indeed.

So, when the real estate recovery starts, it’s not immediately even-handed. It begins in the entry level category. As inventory disappears, prices stabilize. The spread between list & sale narrows. In the end (say a year out?), all properties will find their buyer.

Li Read

Li Read

At the moment, we are often seeing substantial price reductions at the point of the offer, in the high end residential. These dream properties are unique/”one offs”…when one sells, that’s it…thus, just as in the case of entry level properties, that spread between list & sale prices in higher end opportunities will also narrow.

Salt Spring & the Gulf Islands basically had growth “capped” when the Trust was created. It’s about supply & demand, just as we learned in Economics 101.

There is a lot of “unrest” afoot in the world. Things that used to “work” no longer do so (thank you Internet world). Economies pretend to recover. Underneath it all, a subtle return to hard asset investment choices is underway. Keep an eye on the fine art sales at major auction houses. A purchase of a unique item is a preservation of capital move, I believe. A purchase of a property where growth is curtailed is a marker of overall uptick, in the long term. Supply and demand is the key. Safe haven investing? More info? Call me!

The good news right this minute?

The amazing Gulf Islands & Salt Spring Island are seeing an authentic recovery of the real estate market, after a very lengthy “pause” (7 long years?). All good news.

In real estate, no matter the terrain of market trends, there is always opportunity. In a shift, one just needs to reposition.

May 2015, Market Analysis

May 2015, Market Analysis

“Been down so long it looks like up to me”…. The real estate song in all secondary home/discretionary markets, during the past 7 years? Perhaps.

Important when shift happens to be treading water in the current of change. No looking in the rear view mirror.

The recovery will become more even-handed

The upward shift may have begun in October last year, but slowly slowly. By February of this year, the uptick consistently strengthened in the entry level residential category.

Salt Spring Island

Salt Spring Island

Two years ago, the majority of sales were below 450,000. This year, sales volume may have doubled over same time period last year…and the price ceiling appears to have reached 800,000. All good news.

As inventory continues to thin out, buyers will have to offer closer to sellers expectations. Undeveloped land will begin to gain interest & buyers will consider building projects. Higher tier priced residential will get offers and begin a sales process that will match current entry level priced rhythms.

In other words, the recovery will become more even-handed in the discretionary regions. This overall improvement should be evident by late Summer/early Fall market.

Salt Spring Island

Salt Spring Island

The busiest March Break/Easter Weekend timeframe since 2007 took place this 2015…now every weekend continues to show activity…the signs of a secondary home market recovery are at last fully evident.

The busyness in Vancouver (a primary residence area) for the past 3 years made it difficult for sellers in discretionary coastal markets to understand the lack of action. This was true on Vancouver Island and on Sunshine Coast, as well as on the Gulf Islands. A “by choice” decision can be put on hold until confidence returns.

Early whispers of improvement were there in some discretionary areas by late Fall, 2014. Now, however, we are seeing general activity everywhere in all coastal markets, and 2015 does appear to be the year of authentic recovery.

A seller’s opportunity? Yes…but pricing has not yet stabilized to match the sales volume increase.

We are just now entering what I always see as our main sales window (mid-May to end of September). These next weeks see the beginning of boating season in this unique protected waters marine region. Many special events and important holiday weekends take place…visitor experiences bring property seekers, too.

So…authentic sales volume improvement, rising price points in those sales if lower priced options, sellers achieving close to list, diminishing inventory…it’s the turn of secondary home markets again.

Sellers who followed the market down will welcome this recovery. Real estate companies will welcome this improvement. Buyers will need to become creative in their offering process, in an effort to do their “best deal”. The old real estate adage of “you make your money when you buy” is true for all market trends…and it’s not always about price.

A buyers market is characterized by lots of inventory & few buyers. A sellers market is best described as low inventory & lots of buyers. Supply & demand always dictate pricings.

 

March 2015, Market Analysis

March 2015, Market Analysis – Salt Spring Island

Yes, it’s true…real estate in the secondary home marketplaces, including on Salt Spring Island, continues to strengthen.

Clicking into Place

Ganges Harbour

Ganges Harbour

Our season for coastal discretionary regions runs from March Break to the Canadian Thanksgiving celebration in October. More outcomes to be reported on as activity goes forward…the season is just now clicking into place.

Prices on Salt Spring have not yet stabilized, to date, but sales volume has increased. It may take until May to see the true pattern of 2015’s market rhythm for the Gulf Islands.

Meantime…forecasters are noting continuing growth in primary residence/city markets, including from the elder population.

Remember that Country Mouse/City Mouse story? It was a “grass is always greener” alert…Country Mouse was convinced City Mouse’s life was much more fun, & City Mouse returned the favour…just so certain that Country Mouse had the best of all lifestyles.

You know the rest: they switched lives and discovered the old truth that we are usually happiest right where we first find ourselves. Well, most of the time.

Early & Later Retirement

This aphoristic tale might need a little updating for our times. With life expectancies extending dramatically, we might need to separate retirement years into two sections: Early and Late(r) Retirement.

My thought about this is real estate oriented, as it’s about the advantages/disadvantages of primary residence (city) and secondary home (rural & small town) lifestyles, as one truly ages.

In the early 1990s, pre-internet impact, there was an entire movement being discussed, called Penturbia. The idea was that people would retire & leave the cities to seek pleasing small towns…thus leaving a primary residence region for a secondary home area.

Small towns had infrastructure (hospitals, health services, cultural options, rural beauties on their boundaries, some had colleges/universities, & many offered amenities to allure one in those retirement years. What was that hobby you always wanted to explore? You get the idea).

Now, in the real post-Internet world of 2015 & on, there is a supposed move back to the city from small town/rural regions. Forecasts say that over 70% of the world’s population will be living in cities, in the very near future.

There is also the thought that elderly seniors will prefer to walk to services/amenities and will prefer to live in the heart of cities. It’s not a suburb experience that’s being sought…it’s a move to a downtown core.

Hmmm….

In this great Pacific Northwest Coast region, what are some of these potentially impacted smaller townships?

On the Vancouver Island side of Georgia Strait, we could look at Duncan (the main hub of the very large Cowichan Valley, which includes Mill Bay, Cowichan Bay, Maple Bay, Yellowpoint, Lake Cowichan), plus at Nanaimo, at Parksville/Qualicum Beach, at Courtenay/Comox, at Campbell River. Let’s not forget Port Alberni & the wild west coast (Uclulet & Tofino).

uclulet

What about the lovely Gulf Islands? Southern islands: Salt Spring, Penders, Mayne, Galiano, Saturna, Thetis. Mid-islands: Denman and Hornby. Northern: Quadra & Cortes. And what about southern Vancouver Island: Sooke, Metchosin, Saanich neighbourhoods?

On the Mainland side of Georgia Strait, we have the Sunshine Coast (includes Powell River, Sechelt, Gibsons), plus Texada Island & the Howe Sound Islands (Bowen, Keats, Gambier).

For all of these regions, a B.C. Ferry is involved in transport from the Lower Mainland, and a second ferry is required for a Gulf Island. Or, a floatplane or land based plane as travel opportunities are also possible to these destinations.

Hmmm….

So, if people enjoy vacation places on the Gulf Islands, on Vancouver Island, & on the Sunshine Coast, and then retire to them for that first time discovery retirement age, & then live on to where they might be in that second retirement phase, what then?

Well, if we’re talking about the over 80s age group, and we are, then what about driving? In some areas, one loses one’s driving licence at age 80…regardless. Diminishing physical health may become an issue. The loss of a partner can breed isolation and loneliness.

Hmmm….

I can see that enjoyment of a recreational property between childhood (with parents) to retirement (say, age 60, to your own retreat property), will add to the quality of your life. After 80, however, what might be best alternatives?

Good transit, easy walking places, all amenities easily at hand, smaller homes with no yard maintenance (spells “condo” to me), plus options specific to aging seniors to keep those grey cells in good order…all might be on a script for positive aging. Are such aging in place elements strongly in place in a secondary home area property choice?

Behold the Second Segment of Aging

Well…there’s the challenge for all those delectable secondary home & recreational & retirement regions. To be able to remain in these scenically pristine regions will only add to the quality of life for all who are lucky enough to live in same. It’s essential, though, to be paying attention to that second segment of aging, & to meet those challenges.

Time to talk to the elected officials, whether municipal or CRD or Islands Trust…plus provincial & federal. Let’s make sure that the energizing & inspirational aspects of life in a secondary home region continue to optimize lifestyles between 80 & 100+.

The biotech revolution predicts that many will live to 100. The small town/rural options maintain a strong sense of personal community. Surely this is the key to successful aging outcomes?

Hmmm….

I think the smaller & more caring approach is key. It needs to be coupled with a physical infrastructure of ease, tailored to those physical dilemmas that capture the elderly. The personal recognition in a smaller community perhaps far outweighs the anonymity of a city environment. So, public officials, are you on this & are ahead of the need?

Salt Spring Island is well positioned in that it seems to attract a thoughtful population, & this aging in place aspect, for age 80 & older, is actively on the agenda of this unique community. Join in the discussions. Salt Spring often models out successful solutions for many community challenges…positive aging in place is no exception.

January 2014, Market Analysis

January 2014, Market Analysis

I find that January in particular, & perhaps the first half of February, often carry forward the specifics of November/December of the previous year, when it comes to real estate activity. An overlap Winter Season rhythm, thus.

Salt Spring Island

Salt Spring Island

In our secondary home & increasingly seasonal marketplace, we now seem to be focused on a March Break to Canadian Thanksgiving (early October) timeline for viewings/sales. The busier months would perhaps be May, July, August, September in our particular discretionary region.

Economic global trends might make themselves more clearly felt by mid-February, too. It’s very difficult, at these opening days of January, 2014, to make any projections about real estate market outcomes for Salt Spring & the Southern Gulf Islands.

My decision this time, then, is to report in at month’s end, instead of at the very beginning.

During January, I will be reading various economic projections, local & global, & will be attending significant economic think-tanks, & will also be keeping in touch with real estate sales outcomes throughout the Gulf Islands & on Vancouver Island. A month of assessing….

On the Coast, the recent B.C. Ferries decision to both cut numbers of sailings/& to raise fares on some ferry routes, may have a substantial impact on the Gulf Islands. It’s a key issue for all coastal communities & local Chambers are connecting to deal with this…including Salt Spring’s Chamber.

Look forward to reporting in to you, at month’s end, with my various findings.

It does appear that secondary home markets are seeing a slow uptick in activity, after a good five years of inaction on the part of a buyer. Sales volume did improve throughout 2013. Price points were still mainly in the entry level residential category.

Is it a sustained growth pattern, though, & will it now encompass all property types & price categories? Will 2014 be the visible face of an authentic real estate recovery in our “by choice” Islands environment? More later!

We are so lucky on Salt Spring Island & on the other Gulf Islands to enjoy a temperate climate, with the ability to be self-sufficient, & yet with proximity to major centres…apart & yet connected. The definition of a pleasing 21st Century lifestyle?

If you are thinking of a property purchase on Salt Spring Island, or on another Gulf Island or on Vancouver Island, please contact me. I look forward to bringing my knowledge (of both inventory & of trends) & expertise (managing broker’s licence & strong negotiating skills) to your benefit. Call me, & discover the difference that does result in connections between a seller & a buyer. The successful outcomes for you, the client, are my motivation.

How may I help you to buy your special Island property?