Tag Archives: Real Estate

Market Analysis, September 2016, Salt Spring Island

Salt Spring Island

Salt Spring Island

Beginning of the Fall Market

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

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

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

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

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

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

On Salt Spring Island

On Salt Spring Island

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

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

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

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

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

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

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

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

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

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

The sales stats to date break out as follows.

January 1 to August 28 “solds to date”:

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

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

Market Analysis, July 2016, Salt Spring Island

‘Tis The Season!

July is the mid-point in our year and is also the beginning of our “real season” in real estate showings and subsequent sales. Salt Spring and the Gulf Islands, and many of the Vancouver Island communities, are secondary home markets. They are busiest between July and October.

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Secondary home/recreational areas do not follow the sales rhythms of primary residence/city regions. Thus, although eventually propelling activity in discretionary areas, Vancouver and Victoria real estate outcomes are quite different from those on Salt Spring or Mayne or Gabriola or in Parksville.

The huge sales volume in Vancouver, with resulting price increases, appears to now be mirrored in some parts of Victoria. That kind of sales frenzy is never the outcome on a Gulf Island or on Vancouver Island…the Islands are “by choice”/discretionary areas. By choice, I will buy on Salt Spring…by choice, I’m moving to Pender…by choice, I’m considering Qualicum…and so on.

What does this mean for a seller in these secondary home regions?

It’s become essential to have maintained one’s property.

It may be that all those popular HGTV style home shows have created a buyer who expects things to be “done”. Buyers do not want to call in a contractor…they are not looking for a fixer upper or a handyman special. If one has that kind of deferred maintenance property to sell, it may be necessary to come to market with a severely below market price tag. It’s interesting, this lack of buyer desire for a property needing “work”.

A new roof, a new deck, a septic system in good order, a well with water treatment system in place…these are now considered essentials. Interior items? Kitchens and bathrooms remain the two key components that will attract a buyer’s interest. Next would be flooring choices. Home ownership does bring with it consistent maintenance care. Renovations to update an older more dated home are often required.

Stiff Competition Remains

In our global post-Internet world, all secondary home areas are in competition with each other. It’s not just about a Salt Spring property being in competition with another Salt Spring home. A Salt Spring property is now competing for a buyer’s attention with a home on Galiano or on Thetis or in South Cowichan or in Parksville or in Courtenay/Comox…and also in Sidney or in Victoria. That means that a buyer also has to choose for the community itself, and not just a house in that location.

One thing that is of interest for any purchase on any Gulf Island: the form of governance has “capped” growth via strict zoning/density controls. The Islands Trust’s mandate (in place since 1974) is to preserve and protect the Gulf Islands. There is no opportunity then to see an explosion of growth on any Gulf Island.

On Salt Spring, as one drives about the Island, one is pretty well looking at “what is”. This retained beauty is important, but a cap on growth also leads to an escalation of prices, over time. Buyer interest coupled with low inventory of properties does lead to price stability and price rises.

The past downturn in all secondary home markets, and globally so, has eased or ended. It was a long eight year downturn. That lack of buyer interest did lead to lots of inventory and to lower prices. This is apparently now over.

Sales volume has dramatically increased on Salt Spring and inventory has returned to low levels.

The same dynamic is in play on other Gulf Islands and on Vancouver Island.

The difference from previous times? That competition factor. A house in Qualicum is competing with one on Salt Spring which is competing with a property in Sidney…the playing field between locations has broadened.

This means that one has to sell Salt Spring itself, not just the property located there. Hmmm….another reason to shop local and so to ensure the continuing allure of Salt Spring Island? Interested in how to help to do this? Connect with the Chamber of Commerce and become a supporter of the entire community.

At this mid-point moment: between $300,000 and $750,000 price range, there are very few residential options left. Spring sales volume doubled and little new inventory came onstream. Low inventory plus renewed buyer interest leads to price increases.

Now, we are seeing interest in undeveloped land…with a view to putting up a modular or packaged home…or building a cottage and then the house. This scenario might allow one to remain at budget.

Slowly, we are seeing the upper tier priced residential offerings capturing interest. Inventory is also thin in that price point. There is renewed interest in commercial options.

Market Analysis, May 2016, Salt Spring Island

Market Analysis, May 2016, Salt Spring Island

Market Recovery - Salt Spring Island

Salt Spring Island

Signs of a Seller’s Market Recovery

Yes, it’s really true…after an 8 year market downturn, we are finally seeing a resurgence of authentic activity in our secondary home/discretionary real estate market.

Many listings had followed the market down. Fine properties and well-marketed…but few buyers around. In a downmarket, buyers are scarce. In past five weeks, many of these long listed properties have now sold. Very few new listings are coming onstream to replace these steady “solds“…this is the sign of a seller’s market.

At the moment, it appears that sales volume has doubled over the same period as last year and that prices have stabilized (meaning that the buyers are having to offer close to or at list price to secure a property). Price rises and back-up offers may be next.

Salt Spring Island Ganges Harbour - Market Recovery

Salt Spring Island Ganges Harbour

Vancouver Origin

This authentic recovery is very new…began from one-day-to-the-next, approximately 5 weeks ago. Most buyers are from Vancouver. They have sold properties in Vancouver’s hot market, and are now seeking alternative places.

In late Fall of 2015, these property seekers were first looking on Sunshine Coast & in Okanagan communities.

Finally, it’s now the turn of Salt Spring, Gulf Islands, and Vancouver Island, to be considered as the new lifestyle choices.

The desire for a unique hard asset investment is strong again. The “safe haven” seeking may also be a part of sales in our beautiful coastal region. The natural rhythm of a market recovery…every 10 years there is an uptick?…is also a part of this return to a strong sales pattern. There is never just one reason for a market recovery.

Recoveries are never even-handed, especially when they first begin. There remain very pleasing properties at approachable prices. There are still opportunities for a buyer.

As residential offerings continue to thin out, it may be that an undeveloped land purchase will be in a buyer’s favour. Build a cottage, or barge on a home being saved from a city’s destruction, or consider a package home.

A renovation project on great land should always be considered.

Call me for ideas that work.

Creative financing can be a buyer’s friend in an upmarket trend.

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.

May 2013, Market Analysis

Ch-Ann

Recently watched a cable t.v. knowledge network style bio on a local game designer…he was one of a few game programmers/designers to be given new virtual tour equipment, to see what kind of game he could come up with, in using it. Wow! There’s the 21st century for you. A small town techie on a par with silicon valley style locations.

Beyond the “anyone anywhere can invent the future” scenario, though, lives (perhaps) the next great thing.

If within 2 to 5 years virtual reality will be seamless & everywhere, a guesstimate by this game designer, then why will we need real malls, real storefronts, real showrooms, real offices…already the retail world is moving online, the most recent recipient of that Internet eraser.

Salt Spring Island

Salt Spring Island


What will our world look like in 5 years, when this gamer thinks virtual reality will be mainstream?

Will we need real schools? Will we have offices seemingly “there”, but just virtual versions? Retail will be virtual? What will home designs look like?

Hmmm…ok imagineers, it’s change that brings opportunity. Time to be creatively thinking.

And specifically, as it’s my current world, what effect will virtual reality have on real estate marketing?

And your thoughts are? Always welcome!

Locally, our real estate sales window has now become May, June, July, August, September…with the reminder that the first three weeks of June are always quiet.

A short and intense timeline, thus. People search all the time & year round, so it’s important to “be there”, on all the internet opportunities. Otherwise, areas won’t be discovered…people won’t come. So, marketing is a year round business and physicality is a 6 month affair with 3 months being the busiest. Hmmm….

In 2012, we saw a substantial increase in sales volume in entry level residential options. In the main, sales were below 400,000…best described as investments, with rental potential. Prices were not stable and reductions continued, in that search for the bottom. A handful of sales in higher end properties, towards year’s end, in waterfronts, was perhaps a sign of a move back into authentic real estate investment in unique areas. Many of these offerings had been on market for 4 to 7 years, & in spite of reductions in price, en route, there were further reductions at point of the offer.

The first quarter of 2013 has been oddly flat in sales. It may be that a digesting moment is underway: concerns over currency instability, the perceived over-creation of paper monies, banks not easily lending, the Cyprus issue, the threat of terrorism in North America, the intermingling of inflation & deflation scenarios, the search for a safe haven, the desire for sustainability…it’s a mix of all things, and the bottom line could be a flight to hard asset investment as a way to preserve capital.

Safe Haven Investing is my name for it, and Salt Spring Island & the Gulf Islands are beautifully positioned to deliver on this requirement: proximity plus being “apart”.

In many U.S. States, real estate has become very buoyant, with approximately 40% of sales to international buyers. And they are mainly cash sales.

I always feel that our area follows such statistics within 4 to 6 months. Thus, we may see this rush back to property by late July/early August…and there is not a large inventory of listings, as soon as one prioritizes type & price. Hmmm….

Treading water in May/June is perhaps a good idea. The trend for this year is just developing now.

If needing a sale, perhaps try to hang on till mid-July. Things are just starting to clarify.

If a buyer, an alert that the buyers conditions of the past 4 to 5 years may almost be over. These weeks may be the last time to discover a good residential offering at a price that recognizes the buyer point of view.

In either case, change is underway & is happening right now.

Hmmm. In change lies opportunity.