Li Read's Market Analysis for Salt Spring Island Real Estate & Gulf Islands Real Estate

Market Analysis

Current Market Conditions

Copyright, Li Read, 2007

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July, 2007.

In the Gulf Islands/Salt Spring Island marketplace, the "year" actually seems to run from July to July, and not from the calendar year of January to December.

The Spring market, then, is really a continuation of the previous Fall's dynamic.

If there's going to be a further price increase, or a potential decrease, or simply a stable/inactive period, it will be evident in July.

To date, in 2007, there have been consistent sales in the low end residential category, and in the fairly "high end"/luxury price point (2 million to 2.5 million range). There have been few undeveloped land sales (seemingly, most buyers do not want to encounter a contractor; they prefer to purchase an existing dwelling, which is immediately useable, even if they plan to remodel or to rebuild, at a future point).

What I call the "middle band" does seem to be relatively inactive. On Salt Spring, this would be the price point between $900,000 and $1.5 million, say. To date, this inaction, in this market segment, is seen all over the Coast, so, again, it's not specific to Salt Spring Island or to the Southern Gulf Islands.

The RE/MAX and the Royal Lepage companies both put out Canada-wide Recreational Property Reports, in the Spring. Western Investor, plus other business oriented papers, and daily newspapers (Vancouver Sun, Vancouver Province, Globe and Mail, etc.) also carry recreational property reports, in the late Spring time of year.

In these reports, the general consensus seems to be that secondary home markets, whether small interior towns, or Vancouver Island communities, or Sunshine Coast venues, or Gulf Island choices will see huge uptick, as the buyer profile is willing to own two homes, and often will pay more for the second home residence than for the primary marketplace option. It could be that people are buying for retirement, later, and so they are looking for something "fine", in their second home purchase.

On a Gulf Island, the protection of the Islands Trust, with their mandate of "to preserve & protect" the park-like ambiance of the Islands, and with their severe zoning restrictions to accomplish same, one will always find a limited inventory of available properties for sale. This is a form of protected investment, and buyers do note this.

Although it's important for a seller to be listed, and marketed by their realtor, on a yearly basis, it's also essential to note that the buyers tend to come in specific time periods. This is more true than ever. There is sparse weekend activity, at March Break/Easter, & at Victoria Day and Memorial Day Weekends, in May, but the main activity/arrivals time, on the Gulf Islands, including on Salt Spring Island, runs between last weekend in June, throughout all of July, all of August, all of September, and into early October (Can. Thanksgiving Weekend), with consistent daily activity. At other times, it's weekend business, and not every weekend.

The Islands have become a secondary home/discretionary marketplace/destination venue, and so time lags are involved in all sales. First, the potential buyer has to discover the area, then arrive to view, then look around at competing Coastal areas, and then decide "for" a particular Island.

This all takes time, and is one reason why all sales seem to take between one and three years to accomplish. The buyer usually visits at least two times, and often three, before a decision to purchase is made. The buyers aren't "local", and so they take time between visits, too.

It's definitely a process, and if sellers need a quick sale, they soon discover that this is not a characteristic of a secondary home marketplace! The buyer is in control of the "where" and the "when" of all sales transactions, as every purchase on a Gulf Island is "by choice".

The classic signs of a seller's market are still with us -- low inventory and good buyer demand. In secondary home markets, though, one is affected by conditions in the home areas of the buyers, and not by "local conditions". The "plateau period" of 2006 (which was a global phenomenon) may have marked the middle period in a market cycle. As usual, no one has a crystal ball!

Over time, a property purchase on a Gulf Island, including on Salt Spring Island, will prove to be a good investment. Low inventory, due to the Islands Trust's protection and non-growth stance, ensures a stable, if not ever increasingly expensive, area.

Salt Spring Island and the Southern Gulf Islands are special places. Proximity to major centres, yet a sense of being "apart". All amenities easily reached, yet a pristine quality to the land. A micro-climate that offers an almost "california pattern", with more sunshine/less rainfall than other Coastal areas. Plus, sited in the best boating waters in the world!

A very special place, indeed!

For more information on the Islands, and how you can be enjoying same, "see Li for successful solutions!"

Li Read,
RE/MAX Salt Spring
1-800-731-7131

Real Estate Sales & Prices Surge in June

June 2007

January 2007

Entries for 2005 & Earlier

Contact Li Read at RE/MAX Salt Spring, 131 Lower Ganges Road, Salt Spring Island, BC, V8K 2T2, Toll-Free 1-800-731-7131