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Market Analysis, June 2017, Salt Spring Island

Restaurant For Salt, Salt Spring Island

June 2017

The interest in all secondary home/recreational markets continues…on Vancouver Island, on the Sunshine Coast, and on the Gulf Islands.

Salt Spring Island remains a sought-after destination…it is a “stand alone” community, with a year-round lifestyle opportunity, and is very attractive to those seeking more than just a “summer place”.

Salt Spring offers a hospital and good related health segment. There are three elementary schools, a middle and a senior school. There is an indoor pool, an arts centre (ArtSpring), a modern Library/Resource Centre, and myriad park hiking/walking trails to explore. In the heart of some of the best protected boating waters in the world, Salt Spring Island is beautifully sited in the Salish Sea.

Salt Spring Island, Skywater

Salt Spring Island, Skywater

B.C. residents) effectively capped growth on all the Gulf Islands. This control of growth, via strict zoning/density bylaws, has preserved a lovely yesteryear ambiance…yet all that is required for an optimum 21st Century lifestyle is immediately at hand, on Salt Spring Island.

With a micro-climate that supports vineyards, olive grove, orchards, small farm holdings, it is possible to enjoy a self-sufficient living choice.

The real estate market, though experiencing a fits and starts rhythm (offshore tax in Vancouver plus a once every twenty years burst of “real winter” caused significant pauses, approximately six months in total) in 2016…yet now, in retrospect, that 2016 year is showing itself as the sales volume increase year.

So far, in 2017, it continues to be about lack of inventory, continuing high buyer demand, and subsequent price stabilization…it may be that price increases will be a feature of the final 2017 market report.

A buyer’s market simply means lots of inventory and few buyers…prices remain suppressed. A seller’s market means little inventory, lots of buyers seeking property, and resulting buoyant pricings. It is always about supply and demand in a market driven industry.

June is an interesting month. A divide between winter-spring and summer-fall markets. Often quiet in the first three weeks, the serious “season” begins in that final week. July/August/September remain very active in sales, in all the secondary home/discretionary markets.

To date, from January 1 to close of May, the sales on Salt Spring are:

  • 10 between 159,000 and 199,500.
  • 12 between 200,000 and 299,000.
  • 18 between 305,000 and 396,000.
  • 22 between 400,000 and 487,000.
  • 17 between 500,000 and 599,000.
  • 9 between 625,000 and 690,000.
  • 5 between 710,000 and 769,000.
  • 8 between 800,000 and 899,000.
  • 2 between 900,000 and 945,250.
  • 7 between 1,075,000 and 1,750,000.
  • 3 between 2,200,000 and 2,500,000.

The listing inventory (residential/lots-acreages/commercial) remains very “thin”. Although prices have not yet gone up, they have stabilized…in many cases, properties are selling at full list price. Back-up offers are in play and a very few have been in mini-bidding war territory.

The last half of the year will showcase the rhythm of sales for 2017. Am not sure when we went to a late summer/fall market for actual sales, but that is the current tone. People may view earlier…but they often act later. Hmmmm….

May 2014, Market Analysis

May to October is now our main window of opportunity for real estate viewings/subsequent sales, in our specific secondary home/discretionary marketplace.

Perhaps the two May holiday weekends (Victoria Day & Memorial Day) are the busier May times…June is often a quieter month, until the last few days…the July 1 & 4 holidays begin our summer season…with mid-July to end of September being the busiest months for property showings.
Salt Spring Island
Offers may come in at other times, but it’s probable that the initial viewings took place in that May to October timeline.

A secondary home market is always about choice.

A secondary home market is always about choice. The buyer sets the pace. Sellers & realtors present, & try to attract the buyer side, but it’s the buyer who decides the “where” & the “when” of a property purchase in a discretionary region.

Globally, the secondary home/resort-based areas all suffered after the economic meltdowns of late 2008. In many such discretionary areas, the slow-down in sales actually began as early as 2006.

Certainly, on Salt Spring Island, & on the other Gulf Islands, sales volume lessened pre-2008 & prices began to soften dramatically. Sellers did not appreciate the downward signs…it was a slow & steady down trend…in the end, appraisers were stating that prices had reduced by 29% to 45%, with 2006 to 2008 as the start dates of this down trend, leading to the close of 2013.

It may be that 2014 will prove to be the year of recovery in the Gulf Islands & on Vancouver Island. It’s a slow pace.

At the moment, at this early May time, the busy segment remains the entry-level priced residential category.

As inventory “thins”, we may see a move into sales of raw land…one might be able to buy a lot/build a dwelling for less than a renovation of a dated entry-level priced home. That will signal an authentic market recovery.
Some higher priced residential options are slowly finding interest, although they have markedly reduced in price point & have accepted a still lower price at the point of the offer. As inventory also begins to “thin” in this $900,000 to 2 million priced segment, we will see price stability build in…this may not be evident till late Fall.

In these beginning days of what has become our main (& very seasonal) sales window, in our specific secondary home/discretionary coastal marketplace, it can be noted that the recovery is softly underway.

Investment properties are also seeing interest from a Mainland Chinese buyer…Sunshine Coast & Vancouver Island communities have benefited from this buyer profile. To date, on Salt Spring, some waterfront residential options have sold to Chinese buyers, & interest in commercial/investment holdings has just begun.

So…poised for recovery, at the beginning of May. The true buyers market has ended.

In the upper tier priced residential properties, there will be “deals” short-term. The key is the inventory clean-out rate.

It’s not a sellers market by any means, but neither is it a buyers market. Transitional markets don’t last…a market rarely rests in equilibrium…it’s either going down or going up. It appears to be an upward trend.

Will be interesting to look back, after the activity of the next 5 to 6 months…my guess: low inventory, stable prices, slow price point uptick.

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