Tag Archives: market

March 2014, Market Analysis

A Market Recovery?

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March, 2014 – Salt Spring Island Real Estate Analysis
A recovery in the secondary home/recreational market seems to be underway…signs of slow sales volume momentum are globally visible. It has been a long five to six years of buyer inaction in all discretionary regions.

The second home/resort-based areas, globally, suffered hugely after the 2008 economic collapses. No one “has to” buy a vacation home or retire to a second home…it’s always a “by choice” decision.

Buyers decide outcomes in secondary home markets, & the decision to purchase a recreational or retirement property depends on consumer confidence.

Salt Spring Island, the Gulf Islands, & tourism driven communities on Vancouver Island all experienced a significant downturn between late 2008 & mid 2013. Some appraisers & realtors noted a slowdown in activity as early as 2006. The consistent loss in value was felt world-wide in such marketplaces over the past five years.

Values on the Gulf Islands & on Vancouver Island reportedly dropped between 29% & 45%, depending on location & type of property. In Spain & Portugal, it was reported that recreational properties dropped in value by as much as 70%.

Realty companies/realtors kept reducing prices, in a search for “the bottom”. This price cutting does not work in a recreational region…if a buyer does not want to buy, then nothing will happen.
All Listings
Fear has various faces. After little action in 2009 & 2010, there was a flurry of specific activity in 2011. Rental properties began to find buyers…these were not end-users. Family homes, older dwellings, excellent rentals, found investor-buyers. The action was only in the entry level residential category. Was this a move into real estate out of concern that the stock market was too volatile & interest rates too suppressed by banks? Investors were the main movers of sales action from early 2011 to mid 2012.

In 2012, it remained softly active in the same entry level residential segment, but end-users began to reappear. Also, as sales consistently occurred (without many properties coming onstream to replace the slow “solds”), the price ceiling of entry level began to rise.

In 2011, most sales were below 400,000. By 2013, the bulk of sales were below 800,000.

Each year, there were random & scant sales between one & two million…mainly residential oceanfront. In most cases, they had severely reduced in price before selling. Undeveloped land opportunities & commercial/business options remained flat throughout.

January & February usually continue the November/December pattern of the previous year…2014 has been no exception.
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Our market region has become ever more seasonal…the grid of sales activity now falls between March Break & the Canadian Thanksgiving (early October). The busiest months within this timeline might be May, July, August, September.

We are just beginning the 2014 rhythm, then, at this beginning of March moment. It’s still an optimum time to be a buyer…

Projections are calling for renewed interest in undeveloped land…either as a holding property or as a building opportunity. I have always seen land sales as a marker of a buoyant market. Sales of raw land are a strong signal of recovery.

It also is being projected that 2014 is the time of a resurgence in action in the upper tier priced residential properties. The affluent global investor is looking for special properties in special places…with a safe haven aspect to the region. Perhaps a concern over currency instability is driving this higher end property segment…a safe haven seeking, both personally and as a preservation of capital move, can be a strong motivator to real estate activity in the luxury property market. Inquiries on properties between two & five million are occurring.

Tourism, in the secondary home/recreational regions, does encourage real estate sales. People visit, fall in love with an area, buy a home or a lot, & suddenly all other businesses thrive…designers, contractors, restaurants, soft furnishing providers, etc etc etc…it’s like a train, & it starts with tourism & real estate sales.

Slowly, tourism is recovering on Salt Spring, on the Gulf Islands, & on Vancouver Island. All good news, then.

A concern over B.C. Ferries, & its decision to cut costs by cutting service/raising fares on smaller coastal routes, is being fought by affected communities. These route cuts/fare hikes might hamper tourism. If you’re an islander, get in touch with your Chamber of Commerce, & be involved in this important matter.

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So, with the spyglass of projection up to the eye, at the beginning of March, it does appear that sales will be consistent in the secondary home markets. It may be that sales volume will rise, but prices remain stable. Inventory in all property segments will have to clear out before prices rise. The close of 2014 should show strong signs of a recovered discretionary marketplace.

Looking for specific sales information for Salt Spring & the Gulf Islands? Vancouver Island recreational communities? Call me! In a transition period, it’s important to keep up to date. No rear view mirror thinking!

Looking for a Salt Spring Island or Gulf Island property? Call me! I look forward to bringing my knowledge (of inventory & of trends) to your benefit. My motivation is your successful outcome.

Call me for full information on all listed properties & all “solds” statistics…regardless of real estate board involved. Salt Spring & the Gulf Islands are in a “grey area”, which means three boards overlap…I offer full information regardless of which board a particular realtor chooses to affiliate with. I have access to all boards. Don’t miss out…call me! You will discover the entire listing inventory with me.

Residential, farms, vineyards, building lots/acreages, estates, private islands, commercial/investment, oceanfront, lakefront, recreational…it’s all here, in all price ranges, & I look forward to introducing the island & all its fine properties to you.

December 2013, Market Analysis

It’s been an interesting year in local real estate & also in the larger world’s political & economic environments.

The 21st Century is about connectedness, & that means that nothing is too small an event, anywhere in the world…it has an impact on all other regions. The “butterfly effect” is now our global reality.

December 2013, Market Analysis

It used to be said that economic trends were global, but real estate was regional. I’m not sure that this is the case any longer. Marshall McLuhan’s forecast back in the 1970s, of a global village, has come true.

Salt Spring Island, the Gulf Islands, Vancouver Island (outside of core Victoria), & the Sunshine Coast are all secondary home marketplaces…retirement, recreational…discretionary choices, thus. They mainly rely on a non-local buyer profile…someone wanting to move there from somewhere else.

No one “has to” buy a property on Salt Spring, on Mayne, on Galiano, on Thetis, or on any other Gulf Island. No one has to buy in Tofino/Uclulet, in Parksville/Qualicum, in Yellowpoint, Maple Bay, Cowichan Station…or in Sooke or in Courtenay/Comox…or in Sechelt, Robert’s Creek, Gibson’s. These are all regions that have to be chosen by that mainly non-local buyer…thus, the buyer is always in charge of the “where” & the “when” of purchases.

Read the full article…

November 2013, Market Analysis

November, 2013.

Drummond Park

Drummond Park, Salt Spring Island, BC

Change is the mantra of our times…doesn’t matter what is under discussion.

The Internet & its very broad brush, erasing past scripts so new responses can emerge, just continues its message of shift.

Nothing escapes it.

All business models are affected & real estate is no exception. A consumer in charge, & a search rhythm that channels information gathering, are just two aspects of change.

Big picture societal shifts are also well underway.

Is the age of jobs over? If it’s a technology time, then disappearing traditional jobs may never reappear. Is the education system set up to train the engineers & programmers now needed?

One reads think-tank pieces about the hollowing out of the middle class, with fewer people doing well financially & more sliding into lower levels. Is retraining the answer?

Perhaps our time has more in common with the beginning days of the Industrial Revolution…the older Agrarian world was erasing. For a time, the old & the new co-existed…then the wealth tied to land was replaced by wealth from trade & the globalization of Empire.

It must have been a painful shift for those on the Agrarian/land side, & very exciting for those inventing what we now call the Industrial Age. It was a revolution, as it changed a way of thinking about life & one’s place in a social fabric. Dissolution and opportunity, all at the same time. Sound familiar?

Styles of living, with an aging population, are also something to be considering.

A couple of years ago, I wondered, on my radio show, if the boomers would reinvent aging the way they reconfigured childhood & early adulthood…thinking that those who once loved the group/commune life might also enjoy a personal pod space with a community cooking/meeting area.

Just read in a recent Time article that this concept of the tiny home, in a “village” layout, with a communal lodge nearby, is being successfully developed in Texas & in Oregon. One future option for that last third of a life span? Is this a concept that would suit a Gulf Island retirement concept? As Aristotle reminds us, we are a social animal. Isolation is not good for us.

Hmmm…a global village (thank you, Marshall McLuhan, for your imagineering in the 1970s), with a flattening of boundaries due to the multinational culture. A method of communication, the Internet, that furthers a no geographical boundaries world…at the same time that it’s erasing the concept of individual privacy and the idea that the personal & the corporate are separate entities.

Wow…a lot for the remaining hybrid beings (with memory of a pre-Internet world & a knowledge of the post-Internet one) to cope with? Doesn’t matter…the post-Internet beings treat it all like wallpaper…which it is, of course. Important to be in the “now”, always.

So: real estate markets follow cycles, like any market & consumer-driven item. This may be a natural recovery underway, then…year 9 of a 10 year cycle. Plus, societal shifts may be creating a safe-haven seeking…to preserve capital & to seek a level of self-sufficiency. Fear as a motivator! Certainly, for the first time in a 5 to 6 year downturn, in all secondary home/discretionary/recreational regions, there is evidence of a slow uptick.

The ways of connecting a buyer with a seller, however, have dramatically changed…especially in a discretionary region. What does this mean for you? Call me.

On these Gulf Islands/on Salt Spring Island and on Vancouver Island the activity, since early 2012, has been mainly in the entry-level residential segment…up to $700,000, say. Perhaps investor-buyers, seeking tenants/passive income stream? Maybe end-users, seeing the huge value in a recreational purchase after an almost 6 year flat time? Sellers are highly motivated & prices have reduced around 35% since 2007…it might be the last stages of a buyers market, & finally the secondary home regions are seeing this buoyancy, too.

October 2013, Market Analysis

October, 2013.

Ganges, 2013

Ganges, 2013

It’s odd how the Pacific Northwest Coast has a “tail of the dog” pattern in real estate sales…you know: last down & last up.

The real estate market in many other regions in North America is showing a strong recovery. This began in 2012, unexpectedly & strongly. Yes, it began in entry level residential, but it has now segued into the upper tier priced residential options in many areas.

Yes, the buyer is still in control in the upper level pricings category…not so much in the entry level residential segment. In some regions, there are multiple offer situations, price solidity & even price uptick, as inventory thins. Pricing is always driven by supply & demand. As sales remove upper tier priced properties from the market, we will see price solidity there, too.

What is driving the demand? Perhaps a recognition that the value of cash is negligible? Hard assets can become a vehicle to preserve capital.

Along with that, there is a sense that our long accepted world is imploding…change is the mantra of our post-Internet time…perhaps a purchase in a discretionary/resort based/secondary home environment might be seen as a safe haven investment?

On the Pacific Northwest Coast, outside of the city/primary residence markets (Vancouver & core Victoria), it’s been a very slow uptick…the secondary home/discretionary marketplace follows its own rhythm. It has been very flat for past 5 to 6 years. So important to look down the highway & not in the rear-view mirror. Shift happens fast!

While undeveloped land, commercial/business options, & very high-end residential properties remain fairly flat, there are whispers of uptick.

It may be that this Fall Market will be the end of the buyers market pattern in our kind of coastal market. This secondary home/discretionary marketplace includes all Gulf Islands, all of Vancouver Island outside of core Victoria, & the Sunshine Coast. These regions are about choice…not necessity.

However, a seeking of a safe haven is a powerful motivator to action (action has been lacking in the past 5 to 6 years, in all secondary home markets…Spain, Aspen, Salt Spring Island, Palm Desert, Hawaii, Turkey, Tahoe, etc…now, potential buyers appear to be seeking out those slightly apart enclave areas…a pleasing lifestyle but not visibly so)…hmmm…describes Salt Spring & the Gulf Islands very well!

I have often thought of the Gulf Islands, including Salt Spring Island, as the castle…the moat is the sea…the drawbridge is the ferry access. All the amenities/services required for a pleasing 21st Century lifestyle, with that yesteryear apartness, are all certainly available on Salt Spring Island. Plus, a temperate climate that encourages vineyards, olive groves, orchards, that 10k locavore experience…one can be self-sufficient here.

It is, post-Internet, an international buyer profile on the Gulf Islands/on Salt Spring Island. Time is a component in all sales. Time to discover, time to ponder & to compare, time to choose. It can take one to three years to sell any Gulf Island property, in a “normal” market…in a suppressed market, perhaps five to seven years. No one “has to” buy a Salt Spring Island or Gulf Islands property…it’s always by choice & so is beyond market statistics, in a way. Days on market are irrelevant in a discretionary region…price reductions to generate action don’t work…a buyer has to feel the confidence that it’s time to act. In a downmarket economy, discretionary purchases can be put on hold. That pretty well describes the past 5 years!

There are cycles in all markets, and we may be heading into year 9 of a 10 year cycle. We should experience a market uptick in pricings, then, quite naturally, & of a significant nature, as sales build.

On top of that, we have the societal shifts wrought by the Internet, and we also have the continuing repurcussions of the economic meltdowns of late 2008. Preservation of capital is on everyone’s mind. Physical safety is a concern. Is it possible to be slightly apart & also to be self-sufficient?

All of this uncertainty may be the key driver back to real estate investments in secondary home markets…a flight to safety, both physical & economic.

Call me about the advantages to an investment in Salt Spring & Gulf Islands & Vancouver Island properties (Vancouver Island is perhaps just the largest of the Gulf Islands). I look forward to sharing statistics with you, & to discussing the slow forward momentum in real estate sales in this particular coastal marketplace.

September 2013, Market Analysis

September, 2013, Market Analysis

Ganges Harbour, July 2013

Salt Spring Island, July, 2013


For those who own a Salt Spring Island or a Gulf Island property, & who listed back in 2006/2007, it’s been a disturbing ride. The same can be said about Vancouver Island, the Sunshine Coast, & the B.C. Interior communities…all secondary home markets, in other words. The economic downturn afflicted all secondary home regions, globally, and the downturn in recreational areas began long before the obvious collapses in October, 2008.

After a dramatic five year run-up in sales volume & pricings, in the range of 60%, (2001 to 2005), there was a distinct pause in activity in 2006/2007. Prices softened around 12%, according to appraisers, between early 2006 & mid-2007. Sales volume was also visibly lower.

The economic meltdowns of late 2008 had global implications, and all secondary home/discretionary/resort-based/recreational regions were hard hit. No one “has to” buy a second home or make a recreational investment.

Througout 2009, 2010, 2011, there were few sales & those that did take place saw substantial price reductions en route to a further reduction at the point of an offer. The sales were mainly in entry-level residential options. Appraisers say we reduced in pricing, between mid-2007 & late 2012, by around 35%.

2012 saw a sales volume uptick of around 30%, but mainly in that entry-level residential category. Prices remained very unstable. It appeared that these were investor-buyers, looking for 3 bed/2 bath homes, easy to rent…a passive income investment, perhaps. In the main, they were not the end users of their purchases. Most sales were below 500,000.

2013 has seen a similar activity to 2012, but more end-user buyers are around, and residential sales are taking place up to 900,000. A definite improving trend appears to be in play.

A very few upper tier priced residential properties sell every year…so far, this year, the highest sale price was 1.75, and was an oceanview home on a large acreage. It had seen severe price reductions on the way to that sale.

Cottages, higher priced residential offerings, undeveloped land, residential needing significant renovations, & commercial/business options are not easily finding buyers. The bulk of the sales to date are residential options below 700,000.

For those who listed in 2006/2007, at much higher price points, which would have been market value at the time of the listing, it’s been an uncomfortable “search for the bottom”. Sellers & realtors do not create a market…buyers do that. If a buyer chooses the path of inaction, in a discretionary market, then constant price reductions don’t easily work. Buyer confidence is a huge part of the equation!

Those constant & severe reductions in 2011 & 2012 had buyers asking two questions: “how low will the seller go?” (plus: “Let’s wait & find out”) OR “what was wrong with the property?”…in a secondary home marketplace the decision to buy is rarely price driven. It’s about desire & confidence to act, on the part of a buyer.

Companies need income to remain in business. Company inspired price reductions try to create a market. Rare that this works in a recreational/discretionary area. Nevertheless, reductions make all sellers react, so as to be seen as competitive in pricing, once that company driven reduction dance begins. This kind of local market manipulation does create a local price point.

So here we are, poised at the moment of possibly authentic market recovery. Our Pacific Northwest Coast region is the tail of the dog: last down & last up.

In other regions we are hearing about thinning inventory and rising prices in entry level residential options. Even multiple offers are being reported. We are also hearing that the luxury residential segment is improving, in some areas.

Our region often follows trends elsewhere in North America within 4 to 6 months. We should thus be experiencing the same improving statistics by late 2013/early 2014.

A natural cyclical improvement, a seeking of a safe haven environment, a desire to protect capital…these are strong motivators to action in secondary home markets.

As we enter September, and that late summer/early Fall market, it may be that we will experience consistent sales…from now right through to late November. Oddly enough, the Spring timeline is no longer our busiest sales window.

The rest of Canada loves to dream about retiring to B.C.’s coast…with the Boomer move to retirement living choices, Salt Spring Island’s year round lifestyle beckons. Europe, Asia, South America, the U.S. are also looking our way.

The Internet definitely opens up all regions to a global buyer profile. At the same time, it gives that national/international buyer too many choices. So, whether it’s a buoyant or a suppressed market trend, it takes time to sell any Gulf Island property…the buyer looks “everywhere” & is totally in charge of the “where” & the “when” of a purchase decision. Sellers have to practice patience, always.

Salt Spring Island & the Canadian Gulf Islands are not municipalities. They are governed by the provincial government body known as the Islands Trust. The Trust has been in place since 1974, with the mandate “to preserve & protect” the environmental beauties of the Gulf Islands for the benefit of all B.C. residents. This is accomplished by curtailing growth via severe zoning bylaws…in a sense, growth is capped by such controls. Such inventory control does mean, over time, price escalation…as people discover the magic of these islands, want to own a piece of it, and there’s a limited amount available forever…you get the drift!

Are we now on the authentic uptick?

August 2013, Market Analysis

August 2013, Market Analysis

An improving real estate sales trend continues to slowly build into place, on Salt Spring & the Southern Gulf Islands. The same improvement in sales is occurring on Vancouver Island…it’s a secondary home marketplace uptick, then. Prices still remain volatile.

Word from south of the border is that all those hard hit areas (Florida, Arizona, California, etc) have been experiencing a significant uptick in both sales volume and in price points. Inventory levels have been reducing. This encouraging stats report from the U.S. is now encompassing the secondary home/discretionary markets (Vail, Aspen, Tahoe, et al), not just primary residence areas.
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Very recently, the upper tier priced properties in the recreational marketplaces, also in the U.S., have been finding significant buyers/sale pricings. This secondary home recovery is good news for all “by choice” destination locations, and that would include the Gulf Islands.

It’s important to pay attention to this significant improvement in sales activity for our near neighbour…Canada does track events and outcomes in the U.S. It’s about general consumer confidence.

In our post-Internet world, real estate is less regional in outcomes, particularly in the secondary home/recreational markets. The buyer profile in any discretionary marketplace tends not to be “local”.

The Internet has opened up the world as a potential buyer for any recreational based region, but it has also created a “pause” while that global buyer searches out all possible areas. No one wants to make a mistake…thus, the buyer takes time, searches out various locales, often returns two or three times to the places that caught attention…& then may finally “act”. Time truly is a component in all sales, then, in discretionary markets, regardless of market trend in play.

The Pacific Northwest Coast tends to be a tail of the dog location. Last up/last down/last back up…the uptick momentum is just now being felt.

At this midpoint in the year, it’s good to take a snapshot of outcomes.

On Salt Spring & the Southern Gulf Islands, this is also the beginning of what has evolved into our main sales window. Our market has truncated down to a mid-July to mid-November window…a late Summer/Fall market, then. Surprisingly, the Spring months are no longer as busy as in previous times. Perhaps the travel patterns of our tourist visitors have changed?

Tourism, in all recreational locations, drives other business outcomes. Someone visits Salt Spring or Galiano or Mayne, falls in love with that Island, then decides to call a realtor and to buy a property…then architects, contractors, excavator operators, septic installers, electricians, plumbers all get busy, too. Plus landscapers, gardeners, cleaners, soft furnishings providers, and so on. Resorts, B&Bs, hotel, motel, restaurants, retail stores…they are busy with tourist arrivals and also with residents and guests.

A recreational/retirement region depends on that tourism buoyancy to experience real estate volumes and then other ensuing business activity.

The past 5 to 6 years globally have been about economic suppression, and discretionary locations around the world saw plunging real estate values and business closures. No one “has to” buy a second or retirement or recreational property. An economic suppression means a real estate downturn, in secondary home environments.

So what might be driving this renewed interest in discretionary markets? Is it a safe haven investment move? A seeking to preserve capital? Perhaps….

Markets rise & fall…like waves on the ocean. In 2006 we began to fall down into the trough of a downturn…which became hugely evident in late 2008. Now we seem to be climbing up the other side of that wall of water. A recovery is not a straight line up…more like ladders between flat benchland. Up/flat/up/flat…takes time, then, for all property types and all price points, to see consistent uptick.

The good news: things are improving. The difficult news? It’s not a fast-track uptick. It may take until early spring 2014 to see consistent uptrend in the secondary home marketplace, and it may take until summer/fall of 2014 to see uptick in undeveloped land, commercial, and upper tier priced residential sales.

We are so lucky to be owners on Salt Spring Island or on another Southern Gulf Island. Buyers seeking what we own will also be very lucky.