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Copyright, Li Read, 2008 September, 2008. September and October can be brisk months for sales, on the Southern Gulf Islands and on Salt Spring Island. Often, in the viewings pattern at earlier timeframes, people won't "offer" at that time. Sometimes, this is because they are also looking on Vancouver Island and on the Sunshine Coast, and even on a different Gulf Island, and this is quite a usual pattern. The prospective buyer wants "to be sure", before committing to a particular community. If they choose for a Gulf Island, then they will be serious about what they are looking at, and this is why it often takes two to three trips, to "connect" a buyer with a seller. The first visit is an "interview the Island" time, and it's rare that a buyer, today, will act quickly. The real estate market, globally, is in a downward frame at this point in time, and everyone "knows" this, now. Between 2000 and 2002, sales volume rose on the Southern Gulf Islands in the range of 50 to 60%, and prices rose approximately 8 to 25%, depending on the property involved/the specific Island location of same. From 2003 to 2005, it was generally accepted, by appraisers, that prices doubled on the Islands. Tax assessed valuations did not keep pace with market conditions, and so properties did sell, in many cases, for appreciably higher than tax assessed values, during this two year period of explosive price growth/sales volume. Listing inventory remained "thin", and buyers were in a mood to "act". At the close of 2005, perhaps as early as the end of October, there was a "pause period", although it was not really evident until much later. Throughout 2006, globally, the real estate market was characterized by the Wall Street Journal's description: "stable/inactive". Listing inventory remained "thin", prices remained stable, and the buyer had become "inactive". It wasn't until early 2007, however, that it became apparent to people just what had created this static environment in real estate sales. It was most odd to hear that a real estate trend was the same, throughout the world, as was described in 2006 -- real estate is truly a regional issue, and it is very rare to have one trend apply globally. By 2007, it became apparent that the credit crunch, brought on by the subprime mess, had created this world-wide "hesitation", and much earlier than was initially realized, and that this was the reason for the global "plateau". In 2008, all areas are experiencing a downturn in value. In some areas, reductions in the range of 25 to 30% have occurred. In other areas, it is in the range of 8 to 15%. Post internet (the internet erased geography), the Gulf Islands have become a secondary home marketplace, and so their sales statistics and marketplace trends are affected by events/conditions in the home areas of this non-local buyer profile. The low to mid-range priced properties, on any Gulf Island, have found it difficult to connect with a buyer, in 2008, and this segment of the market may be where the credit crunch is most visible, in Canada (a reluctance of financial institutions to lend). In the Gulf Islands, then, it's become a discretionary buyer -- no one "has to" move to Saturna, or to Mayne, or to Galiano or to Pender, or to Salt Spring Island. A decision to buy is always personal, and is at the discretion of the buyer. The buyer decides on the "where" and the "when", then, of any sales transaction, and there is no "propeller" to action, from the buyer's perspective. With the credit crunch still firmly in place, many buyers are adopting a wait and see attitude -- if they wait, prices may reduce further. Some buyers, in the very high end range of properties, have acted -- fear can create "hesitation", but it can also create opportunity, and these more affluent purchasers may have acted out of worry about the health of banks/financial institutions, or the validity of cash (how much is being printed? what's backing same? what about inflation?), or the volatility of the stock market as an investment vehicle. Such buyers, though, are not in huge supply. Sales volume is down, in 2008 over 2007, and it was down in 2007 over 2006, which was down from the "high" of 2005. Prices have reduced, too, and I would guesstimate that they have reduced by approximately 20%, from 2005 to 2008. This will become more evident by the end of October, when the main selling season's statistics will all be available. If the economic cycle is being affected by a societal shift, with the lingering elements of the 20th century clearing out, and being totally replaced by the 21st century ethic, it could be that this dilemma in the real estate market will last for an appreciable time period. There doesn't seem to be any road map out there, with any easy answers. Clearly, the threat of global warming, and the steps needed (of a "green"/environmentally aware/sustainable lifestyle choice) to offset it, have longer legs than a simple market cycle. If the invention of new energy solutions is essential, then the old paradigms will pass away, and it will be painful for anyone still in the "former model". Sometimes, I think we're in a Charles Dickens moment -- he wrote novels that delineated the passing away of the old Agrarian/Rural lifestyle, and the birth of the Industrial Revolution, with all of its excesses. If you were part of the "old", it was a painful dissolution of a lifestyle. If you were in the "new", then you were much more positive! All markets are cyclical, and nothing remains up or down, for any great length of time. Societal shifts, however, take time to work through, and the changes in the real estate industry are occurring at the same time as the market downturn, it seems. On the Gulf Islands, governed by the provincial government mandated Islands Trust ("to preserve & protect"), which came into being in the mid-1970s, there will always be a limited supply of inventory. The Trust's "no growth" policy is evident, already, on the Southern Gulf Islands -- they are pretty well developed to maximum, and so one sees what one is getting, at the point of purchase. This is called "protected investment", and there is a definite allure to such an area, for many buyers. Low inventory with high demand often translates into higher price points, and this is a result of the Trust's low growth/protective stance. Over time, then, an investment in a Gulf Islands property will prove to be very valuable, regardless of short term market swings. The credit crunch may be about 2/3s of the way through its "clean up", and there may be another 1/3 to go. If one must sell, at this time, then it is inevitable that there will be price reductions, to generate some action. The buyer's mindset is that it's time for a "deal". With mortgage rates remaining historically low, and with some easing in inventory, it is actually a good time for a saavy investor buyer to purchase. How to make things work for you, whether a buyer or a seller? Contact Li Read, and find out how to make this current market cycle of indecision and hesitation work for you! Look forward to your call. Thank you. Li Read, liread33@gmail.com www.liread.com 
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