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Market Analysis

Current Market Conditions

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Copyright, Li Read, 2020

June 2020.

Island Dock
Is it time to cast off now? To get going? Hmmmm.....

Between March 12th and May 19th, Salt Spring Island and the Gulf Islands were shut down, along with all B.C. communities, as the province responded to the government’s “stay home/social distance” edicts. Everywhere, only essential services were allowed to be open and social distancing/sanitizing were always required.

The flattening of the curve of the Covid-19 virus has completely changed the terrain of our secondary home regions.

Gulf Island by Air
On Salt Spring, events/gatherings involving large groups were cancelled (Home & Garden Show, Round Salt Spring Sailing Race, ArtCraft, ArtSpring, indoor pool, Saturday Market, Canada Day, Fall Fair, Sip & Savour, and so on). Schools were closed. Accommodations closed. Parks were closed.

B.C. Ferries cancelled some routes and cut sailings on others on April 4th. Flights were on hold for floatplanes, until May 4th. Potential visitors to recreational communities, including Salt Spring, were asked to stay away, and, if owned a second home, not to go to their cottages.

Slowly, some soft re-openings occurred in early May...the government had targeted May 19th as the beginning of mainstream business re-openings. Continued social distancing and sanitizing protocols were required by all businesses. Numbers of customers in a space at any one time were also being strictly controlled.

Deer
All aspects of communication were forced to be online, during the eight week closures. By mid-May, federal, provincial, and local governance groups were discussing what the “new normal” might be like and recovery/resiliency measures were being planned...all via Zoom.

The Before: pre-March 12. The Middle: still going on. The After? Not yet clear.

In seasonal tourism based economies (such as on Salt Spring Island and the Gulf Islands), to lose the traditional business opportunity of March Break to Canadian Thanksgiving Weekend (mid-October) is devastating. Some businesses have been able to pivot to online sales models, but not all are set up to do this. Some may not reopen. The Canadian government projects that 30% of businesses will disappear. How will this affect Ganges Village?

Fall Colours
What was the outcome for real estate sales? Most buyers for Salt Spring properties still continue to come from Vancouver/Lower Mainland. Sellers there become buyers in the secondary home/rural areas.

The Vancouver market began to improve around September/October 2019, after two years of slump due to interruptive provincial government taxation measures to suppress busy city markets. Salt Spring experienced a follow-on increase in sales by November, 2019.

Between November and early March, 2020, the island was experiencing low inventory, buyer desire, stable prices, and seemed poised to have sellers market conditions in place. The March Break season opener beckoned. Then: Covid-19 virus arrived and complete shut-downs throughout B.C., by March 12th.

Ferry
There has been no sudden inventory increase, since the pandemic closures. Prices have remained stable. Inquiries (online) during the shut-down were serious and substantial. May 19th was seen as the slow beginning of potential physical viewings, as government relaxed its “stay at home” measures.

The latter part of May did see people arriving to view, often on a day trip, and some offers were being made. With few listings, buyers were quick to act on anything that caught their eye...most options receiving offers were still listed below a million, but a few higher priced properties, even some that had been listed for several years, were suddenly seeing action.

The real estate board updates about less sales in April/May simply reflected the enforced pauses in activity. These board reports also noted few listings for a buyer to consider, and so stability in pricings remained.

Basket of Plenty
Some are forecasting serious house price reductions across Canada, as a result of the pandemic closures...it is true that people who have lost jobs and cannot meet their expenses will put their hopes for housing on hold. Current events are so without precedent, though, that one can argue many scenario outcomes.

Another scenario is that people able to work from home may be seeking suburban and rural opportunities. Time will decide the outcomes. It may be that buyers from out of country, disturbed by global unrest, will ignore the current 20% offshore purchase tax in Vancouver and buy now. Vancouver sellers become the buyers in secondary home areas.

Projections right now are calling for all secondary home markets to see an increase in viewings (required distancing protocols in place) with potential resulting sales between mid-June and end of September. City dwellers may truly be seeking a move to authentic rural areas, with opportunities to garden/to be self-sufficient, to be less crowded. Hmmm.....the country mouse lifestyle might now be attractive to the city mouse.

Horse
At this very beginning of June, then, there are 74 residential properties for sale on Salt Spring. Townhomes, waterfronts, acreages are not separated out. 38 of these are listed between 339,000 and 999,800. There are 24 properties listed between 1,079,000 and 1,795,000. There are 10 listings between 2,000,000 and 2,999,900. There is one residential listing at 3,179,000 and an 84 acre farm at 6,688,900.

At the very beginning of June, there are 70 undeveloped land properties for sale, not separating out lots, acreages, waterfronts.

At the beginning of June, there have been 59 “solds to date”. Of these, 45 sold between 156,000 and 980,000; 13 sales took place between 1,057,325 and 1,900,000. One sale took place at 2,395,000. In almost every case, a reduction took place at the point of the offer/sale. Most sales took place before mid-March, but a handful did occur in April/May. In most cases, those buyers had been looking at Salt Spring and the Gulf Islands earlier, and so were not “new business”...they had just decided to act.

Misty Mountain
Interest rates have remained exceptionally low. Although there are not a lot of listings (as soon as you put in price and type, you see this), there are good ones and a buyer is a valued part of a transaction...no matter the trend in place, a decision to purchase on Salt Spring is always a choice, and sellers do listen to serious offers. If an owner wants to be a seller, this is also a good time...low inventory means less competition. More information? Call me!

I do my market thoughts at the very beginning of a month, and update via my regular blogs as the month progresses.

Marketing opportunities will quickly change/amplify, as the totally online world supplants previous options. Although important, the MLS is now only one vehicle of online property presentation. Print real estate supplements may not survive.

Beach
It’s interesting about the internet influence...it can make a property look very different from its reality...it can leave potential negatives out of the frame...it can generate a viewing and then lose the consumer’s interest by not delivering on the online promise. It’s important to encourage a viewing, yet it’s also necessary to reflect reality in an online marketing presence. Consumers will want to see physically what they observed online. This may be especially true in rural areas.

As we get to the After, everything will be different. Is that a threat or a promise?

June is the half-way point in a year.. The months of January/February/first of March 2020 clearly belong to a different time. The pause period (mid-March to the end of May) erased earlier expectations. Now, June to late September, if the flattening of the Covid-19 virus continues successfully in B.C., may turn out to be the main sales window for Salt Spring Island and the Gulf Islands.

We all await developments.

Sheep
It will depend on the consumer’s desire to act. Will they travel? Will they want to look at properties? Will the seller allow viewings on a first visit, or will they insist on exterior viewings only the first time? There is no one way to forecast the pattern of a reopening in a pandemic time.

There is both desire and hesitation on the part of a buyer. How will that play out? And what about all those government pay-outs to maintain a population? Will the government re-work the currency to offset the debt? Might this current flurry of interest in real estate in some areas reflect people’s concern about the ongoing value of cash? Hmmm....

Meanwhile, June: blossoms are evolving into apples, pears, plums, nuts, berries, grapes, olives...produce from gardens and orchards and farms are on display at farm gate stands and at farmers markets. The longest day of the year is at hand. The sea invites exploration by sail, power, kayak, paddle board. Parks are open again. Beauty is everywhere on the Pacific Northwest Coast and the Southern Gulf Islands/Salt Spring Island invite one to enjoy this explosion of Nature’s best.

Coons
How lucky we are, here! Thinking of visiting? Welcome!

Thinking of seeking and buying your piece of paradise? Call me...your best interests are always my motivation.

How may I help you with your real estate needs?

Come...discover.

Tel: 1-250-537-7647
E-Mail: LiRead33@Gmail.com


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  • Contact Li Read at Sea to Sky Premier Properties (Salt Spring), 4 - 105 Rainbow Road, Salt Spring Island, BC, V8K 2V5; Direct Tel: 1-250-537-7647