Tag Archives: Luxury Real Estate
November 2015, Market Analysis
November 2015
Fulford Harbour, Salt Spring Island
We are now sliding into the Fall-into-Winter moment.
There is often a perception that Salt Spring, the Gulf Islands, and Vancouver Island are seasonal markets…busier in late Spring and Summer…with less happening in the supposed “off season”. Not so.
It’s important to be presented to the marketplace at all times, in this post-Internet era. The Google search eye never sleeps. Someone, somewhere is searching.
In our secondary home/discretionary region, on this thin strip of the beautiful Pacific Northwest Coast, potential buyers now turn up, physically, between mid-summer and late fall…to view what had caught their attention earlier, on the net.
Many sales thus take place between August and end of the year. This catches many sellers off guard, if they have only a Spring/Summer mindset for a possible sale.
At this point, in a still busy sales time, we can point to continuing signs of an authentic market shift…in a strong upward direction:
- Thinning inventory.
- Rising price levels in the entry level residential priced category.
- Sales of undeveloped land.
- Stronger interest in higher end residential options…with more sales in this segment.
- Buyer desire to buy a retirement or recreational or investment property.
- Concerns over currencies making hard asset investments of interest.
- Media reporting on all the above.
No matter the market trend in play at any time, there is always opportunity in a property purchase. Over time, a real estate investment is an important one. It is a wealth builder and a wealth preserver, although it is a “long tail” investment decision.
If you are considering a purchase of a Salt Spring Island, other Gulf Island, or Vancouver Island property, call me. My strong referral network will connect you to the best agents if your wish list lies in an area outside my circle of expertise. Benefit from my knowledge, of both inventory & of trends…let me help you to discover the right property for you.
The transition period between a buyers and a sellers market is rapidly closing, in our Gulf Islands area.
In the entry level priced residential properties (below $550,000, say?), we are already seeing sellers conditions. In undeveloped land sales, it’s still early days. Waterfront & superlative ocean view acreages always see earliest activity, in upper tier residential (over $900,000), and this pattern has just started (since August?)…waterfronts and equestrian friendly acreages are currently most in demand. The spread between list and sale price points is rapidly narrowing in all property types.
These are the key factors pointing to the close of the transition period: narrowing price spread, thinning inventory, sales volume increase.
Our coastal secondary home regions only began to see “soft” recovery in late 2014. Now, although still not even-handed, and many properties still not seeing “fast sales”, we are almost through the transition period…many people, locally, liken both our current real estate and our small business recovery to 2006/2007 patterns. Pre-economic collapse of 2008, then. All good news!
How may I help you to buy your special Salt Spring Island, Gulf Island, or Vancouver Island property? Call me! Look forward to working with you.
March 2014, Market Analysis
A Market Recovery?
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.
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.
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.
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.
April 2013, Market Analysis
Spring! Blossom Festival begins the dance of Salt Spring’s season.
We who live here are lucky to celebrate a lifestyle in the midst of beauty. Our wonderful weather “season” is from now until the Canadian Thanksgiving Weekend in early October…this is a treasured location.
Is the government mandated Islands Trust control of growth the reason for the preservation of the environmental beauties of the Gulf Islands? I think so.
The Trust’s mandate was to preserve and protect, for the benefit of all B.C. residents, the park-like allure of these islands, and it was put in place in 1974.
I think most residents & visitors would agree that this was a worthy goal, and that zoning restrictions were there to safe-guard the beauty.
When, though, does a loose body of regulations solidify into intransigence?
Isn’t the point of elected representatives to interpret a regulatory framework, for the good of the overall community? In that interpretive role, isn’t it essential to allow for individual responses without being afraid of the dreaded word precedent? Did the Trust forget the people?
A community’s self-sufficiency is based on the ability of its population to maintain itself, to foster and encourage sustainable growth, to respond to changing times for the benefit of the entire community. Entropy is the result of an unchanging response. Entropy leads to the death of an organism.
Salt Spring has been blessed in past years to be what I call a stand-alone community. One did not have to leave the island for services/amenities unless one wished to…the island was not a bedroom community of towns on nearby Vancouver Island. Can we say this is still the case?
In recent years, did the elected trustees overstep their mandate and stray into lifestyle decisions of the residents? Businesses that gave work to local residents have closed and moved off-island. More may be considering this.
The big box stores in Duncan are only a 20 minute ferry trip away: Home Depot, Walmart, Rona, Staples, London Drugs, plus the satellites that go along with plaza life (Starbucks, Tim Hortons, KFC, et al).
The Chamber of Commerce also has a mandate: to support local/community businesses and to create an atmosphere of opportunity for them. It is a volunteer body.
Salt Spring, as part of the Islands Trust governance model, is not a municipality. There are two elected trustees per Gulf Island. There is also a CRD director…CRD stands for Capital Regional District. This is also an elected position. As an unincorporated area, Salt Spring is under Victoria’s CRD re building permits, septic installations, etc.
One can see, though, as population slowly grew, since 1974, that there was a void there. The Trust is about land use bylaws. The CRD is about granting septic and building permits, so that construction is to current code requirements. There is no local elected mayor/council to aid the community’s progress.
What about an overall plan to ensure that residents lifestyles are also encouraged and preserved?
There is no funding from the provincial government to the local Chamber, as the Island is not a municipality. Thus, Chamber activities to benefit local businesses are all volunteer driven…with monetary support for tourism related events raised from the same local businesses.
The economic meltdowns between late 2008 and late 2012 caused tourism to halt in all secondary home/discretionary areas. On Salt Spring, tourism in 2010 & 2011 was apparently down by 40%. This affected accomodations, restaurants, studios, galleries, real estate…which in turn affected lawyers, contractors, architects, etc. It’s a wheel that rolls or else falters and collapses.
There is, at the moment, a sense that no one has been looking after the preservation of the Island’s lifestyle…no one helping the residents.
When I arrived in 1989, it seemed that “everyone” was here: affluent, old hippies, artists, farmers, retirees, young families, teachers, nurses, ferry employees, retail owners, summer people, spec builders, etc. Just the normal mix in any small rural community.
So…what happened?
Is it just the law of unintended consequences at work? Is it that those initial regulations to address uncontrolled growth have spawned into more regulations, narrowing interpretations of original bylaws, simply to fill a void?
The community did seem, in the 80s and early 90s, to work together…it still comes together to help when someone is afflicted with an accident or loss by outside circumstances. There now, though, also seems to be a very divisive attitude in evidence…fixed positions…no conversation of negotiation.
I sense that Salt Spring is well on its way to being a safe haven for an affluent buyer. It may be that those who service such an area will be coming from off island. The Trust’s point in 1974 was to preserve the park. This was accomplished.
A decision to control growth in a beautiful area does have the effect of making it a place one has to be able to afford. The Trust created, on all the Gulf Islands, an eventual outcome of being expensive places to live. The old adage of supply and demand in play.
It is what it is.
The Trust could have created thoughtful affordable housing zonings, industrial land groupings, & thus have preserved small family businesses, that hire locals, that support other local businesses. They did not.
Currently, there is a governance study underway on Salt Spring. There will be an eventual referendum to decide whether or not to have a Gulf Islands Municipality. This is the second such study/referendum process.
If a yes vote? The Trust would remain, with two elected trustees, and the bylaws in place. The CRD role would be taken over by an elected council, on Salt Spring, and so there would be local people in place to look after lifestyle options for the residents. The encroachment of the Trust into this realm, to fill a void, would end. The Trust, its elected local trustees, and its land use controls would remain.
Very recently, the CRD has struck a committee known as the EDC (Economic Development Committee). This committee has pulled people from local groups such as: accomodations, tourism, chamber volunteer groups…is it a think tank? Is it working to fill that local presence void, in case the governance study outcome is a nay vote? Are your concerns being met? Ask questions!
Is incorporation a good idea for Salt Spring? Attend the meetings, listen with an open mind. It’s an important issue with a serious outcome, on either side of the question.
My hope is that Salt Spring Island will remain that vibrant stand-alone community structure, with opportunity for all population segments. How best to ensure this?
Be a part of the decision making…it’s your island, after all. Be informed.
Tourism engenders real estate outcomes and thus ensuing good business outcomes for all other enterprises. Another reason to support the Chamber of Commerce.
The real estate market on Salt Spring Island, the Gulf Islands, and on Vancouver Island is still slow in sales. There is an increase in interest…inquiries are stronger…there is no marked trend, yet. In 2012, most sales were in entry level residential. In the final months of the year, some upper tier priced residential options found their buyer…at reduced price points from list pricings. Undeveloped land and commercial options remained “flat” throughout 2010, 2011, and 2012.
It may be that 2013 will be a year of authentic recovery in real estate in our secondary home/discretionary area. It may take until July to see this build in. The main sales now take place, in our seasonal marketplace, between mid-July and November. With the impact of the Internet, it’s important to be listed and “present”…otherwise, how will the searcher discover a specific property? Perhaps by early May, the trend-line for 2013 will be sufficiently in place to see a pattern.
The driver to action this year may be the seeking of a safe haven. Preservation of capital and the ability to be self-sustaining are powerful motivators to action. The cash on the sidelines may be flowing back into secondary home markets, and globally so. The issues in Cyprus, towards the end of March, may have hastened this shift out of cash, held in savings, in financial institutions.
Many insecurities abound, globally, and the Gulf Islands are not exempt.
What can we appreciate? A micro-climate that enjoys a year round opportunity, farms and the 10K diet are alive & well. The best protected boating waters in the world, at our doorstep. Ecological beauties to enjoy. Creative & thoughtful people to bring forward solutions to 21st Century issues. Lucky us, we who now call this region “home”.
May I help you to discover your special property on Salt Spring Island, on the Gulf Islands, and on Vancouver Island? Your best interests are my motivation. Please call…look forward to meeting you, and to helping you become an Islander, too!
January 2012, Salt Spring Island Market Analyses
January 2012, Salt Spring Island Market Analyses
Happy New Year!
I think many people will be glad to see the back of 2011…we may look back a few years from now and decide that 2011 was the key year in the societal shift that has been underway since 2000. Key in the sense that change erupted in all spheres & all at once…political, economic, societal, and personal…you name it, it will have changed, shifted, evolved, erased…and what about the newly created? 2011 seemed to be the year all elements conspired.
The economic downturn of October, 2008, global in its impact, broadened from the housing bubble to the banks and to Wall Street. Now it has further expanded to the geopolitical level. Nothing is exempt…the Arab Spring, the Eurozone meltdowns, the economy continuing to wallow in the doldrums, the power of the consumer of services restlessly angry…think about the now global Occupy Movement & the new Russian dissatisfaction with potentially rigged elections…plus wars & rumours of wars & unrest in Syria, Iran, Afghanistan, Pakistan, DR Congo…shift everywhere!
In change lies opportunity…well, yes, but the speed of change is the unknown. The internet’s binary rhythm (on/off, act/react) can occur in an eyelid’s blink. In the past, change was a much slower animal…in some cases, it was possible to think through a shift and to reposition.
Today, our technology has erased time, and instant responses are demanded. Flexibility has become an essential. Twitter’s immediacy gets data out there asap, and the reaction to it is just as immediate.
What about our editing function? Important to turn all that undifferentiated data into worthwhile information…what’s important/what not?
I like to save my projections till later in the month…so many trajectories underway: the uncertain outcome of the bid to save the euro world, the worry about the U.S. ability to restructure & move forward, the concern over outcomes in North Korea, the potential for unrest in China, the continuing dilemmas of terrorism & sectarian violence in Africa & in the Islamic world, and the potential for unrest in Russia. Important, I think, to digest the effects of the last quarter of 2011, and to see what the winds of change are blowing our way in the first quarter of 2012. Perhaps the real beginning to a new year is in early March?
Hmmm…the Chinese lunar new year is earlier this year, arriving at the close of this month, and heralding the Year of the Dragon. Sounding fiery?
Important at such moments of flux to remember what is important…to be thoughtful with our nearest & dearest, to be inclusive & remember those on their own or needing a helping hand, to take time to eat healthily, to walk that 15 minutes a day, to admire a beautiful day, to breathe deeply and to calm that rapid fear-based breath. Read more, less t.v. Move away from the virtual world and take five in the reality check zone. Learn something new…how about a foreign language? A humbling experience & a way to keep the mind active!
It’s the start of a New Year, with everything before us, second chances & new discoveries…let’s take five and accept the challenge.
Oh, yes…the real estate market…well, I think it’s hard asset investment time again, and that those who can will seek safe havens…both as a way to preserve capital and for personal safety/sustainability. Regions such as the Gulf Islands/Salt Spring Island and Vancouver Island will be on the shopping list. Inventory is medium, interest rates remain historically low, prices have reduced around 30 to 35 % between 2007 and now…sellers are highly motivated, allowing for further reductions at the point of an offer. An ideal time to be a buyer…. It may be that we are entering year seven of a seven to ten year cycle, and thus are already slowly on the way up…. Hmmm. Wish I could find where I put that crystal ball!
More information? Call me!
December, 2011, Salt Spring Island, BC
December, 2011.
The end of the year is a time to both look back, as a kind of summing up, with the benefit of hind-sight, and also a time to look forward, to dare a little, to make some projections.
The hind-sight part:
On looking back, it’s clear that entry level residential was the flavour of the month, IF a buyer could be encouraged to act. When I look at the “solds to date” info, for 2011, I can see that the bulk of the sales have been below $650,000. What doesn’t show on my “solds to date” info is the price reduction track…it only shows last list price plus the sold price. (Please call me for this definitive list…other solds info might be Board specific…mine shows the total sales picture).
The sales over $800,000 (few of them) tended to be waterfront options…many needing work to the dwellings…not move in ready…or, perhaps cottage/retreat, not “house” options.
In a down market, both fine oceanviews and undeveloped land options suffer.
When pricings come down by 30% (this is what appraisers surmise, between mid-2007 & present day), then the spread between fixer upper oceanfront and fine oceanview narrows. We are an island, and so the first choice is always oceanfront. Buyers will pick up a fixer-upper before they will view a state of the art oceanview option…ah, the water, the water!
The lack of interest in undeveloped land choices, no matter how delectable, even superb oceanfront options, is another indicator of a downmarket moment.
In a secondary home/discretionary marketplace (which describes Salt Spring Island & all Gulf Islands, plus Vancouver Island outside of core Victoria, the Sunshine Coast, & many of the B.C. Interior communities) no one “has to” buy anything…it’s all by choice, and the buyer is in control of the entire process, both the “where” and the “when” of all purchases.
In a downmarket, a buyer can put a second home, a recreational, a retirement choice “on hold”, thus.
An entry level price point purchase is either an opportunity for a local to buy (3 bed/2 bath home is the desire) or an investor looking for rental income might also act. It’s not necessarily an end user.
So, that’s the hind-sight view: for the past three years, the activity has been in entry level residential. The price of this has come up from $400,000 to $650,000, however, and this is a good sign.
No interest in undeveloped land (no one looking for a holding property, no one looking to build), no interest in businesses or in commercial/investment options, and little interest in the upper end residential pricings (any sales, and very few of them, saw huge price reductions at the point of the offer, even after significant price reductions en route to the sale)…typical scenario, then, of a downmarket syndrome in a discretionary area.
It seems to be widely agreed now that the U.S. Recession had begun in 2007. It’s also evident now that secondary home/discretionary areas, and globally so, had flattened in 2006. The Wall Street Journal, in January 2007, noted that all discretionary markets had become stable/inactive in 2006…meaning that inventory & pricing was stable & buyers were inactive. This inactive buyer scenario has been in place, in secondary home/resort based areas, from 2006 to present day.
Are we then in year six of a seven year cycle, and thus already on our way up?
Hmmm…wish someone could produce the crystal ball!
It is true that we are in a time of huge shift, and societally so. Economics is the pied piper, and the continuing geopolitical meltdowns continue. No business is exempt from the effects of the Internet, which has placed decisions in the consumer’s hand, and also has opened up the factor that someplace is now in competition with everyplace, re real estate options. It’s almost a given that if something “worked”, in business, even five years ago, it won’t now. No roadmap, then.
Downgrading of the U.S., Eurozone incipient collapses, the rise of China, the bailouts (money being printed?), earthquakes that cause economic loss as well as lives, severe weather problems, Arab Spring revolutions that upset 30 & 40 year patterns, the re-emergence of an autocratic Russia, etc etc etc…no place is exempt from the repercussions of change.
It used to be said that real estate was local…this is less and less true. The post-Internet world is the world of the meshed global village, and every place is affected and is in competition with every other place.
Different days!
The projection part?
Ah…now that is a daring thing to attempt, in this cloudy time of uncertainty. Would we call this moment the Age of Insecurity?
Let’s dare:
– if we are in year six of a seven year cycle then we should notice thinning inventory and increasing sales, perhaps by Spring, 2012.
– when inventory of good properties thins, and the buyer sees good value in buying real estate, most likely to preserve capital, then prices will start to rise.
– the sale of undeveloped land choices may signal this shift of market dynamics. If good residential inventory thins, then it makes better sense to seek land deals and to build, rather than to renovate severely a so-so option.
– with the continued bailouts, inflation may be the outcome to the past four years of maybe yes (inflation) / maybe no (deflation) debates. If so, buyers may choose discretionary real estate again, as that preservation of capital move…unique properties will be their quest.
– people may also look again at smaller communities, well apart from big city pressures…where sustainability is possible. The recent occupy movements, which crystalized diffuse anger, may encourage a seeking of a safe haven….
An aging population, a desire for a gentler lifestyle, a seeking of a location that offers the ability to enjoy the pleasures of life in the wired world of the 21st Century while still retaining the bliss of a “yesteryear” experience (of appeal to a young family), where all strata of a population and all demographics mingle…sounds a lot like a search for Salt Spring Island, or a nearby Southern Gulf Island…temperate climate, sustainable lifestyle, educational opportunities, rich cultural options, in the heart of the best protected boating waters in the world…it is special.
How may I help you to discover this lovely area? Benefit from my expertise and knowledge, of both inventory and of market trends. A full time and full service real estate agent, successfully connecting sellers with buyers, since 1989, I await your call.
How may I help you to buy your Salt Spring Island or Southern Gulf Island property?
