Copyright, Li Read, 2023
February...and the slow slide into Spring begins.
It's a short month, with a romantic allure on Valentine's Day (Feb 14th), and a weekend holiday on B.C. Family Day (Feb 20th) Weekend.
Yes, a mix of winter and early spring, with that freshening sense of new beginnings (always the welcome message of real Spring).
Early Real Estate Patterns Emerging
What about the real estate patterns that are also beginning to emerge? It often takes until mid-March to get the tone of a market in a secondary home marketplace, such as the Gulf Islands. The buyer profile on the Gulf Islands is not local...buyers arrive from elsewhere...and for the last several years (perhaps fully since 2015?), the main buyer has been from Vancouver/Lower Mainland.
After the first pandemic closures in early 2020, real estate activity began...the flight from urban to rural was the main driver to action. The ability of the internet to authentically allow the option to work from home, no matter that location, also was in place by 2020...allowing that rural shift to successfully take place.
In 2021, the inventory thinned out dramatically in all rural areas and in some cases there were bidding wars (more buyers than sellers). The low inventory continued throughout 2022, but buyers were pausing...inquiries came in, viewings would take place, but activity from buyers had slowed. Uncertainty was the culprit.
In the latter part of 2022, worries about the impact of distant wars, supply chain issues, concerns about lingering pandemic and health outcomes, fears about rising interest rates, currency concerns, reports of a global recession...all of these uncertainties had buyers simply treading water...are we safe? That seemed to be the major question. A pause is not necessarily a correction.
Lack of supply is what keeps prices stable and potentially tracking higher. The federal government is seeking immigration of 500,000 each year for the next two years. At the same time, they are putting a two year ban on foreign ownership. (There are many exemptions and one of them is that the ban will not apply to recreational areas (such as the Gulf Islands). Check the federal government website for further details).
Less Supply, More Demand...
CMHC (Canadian Mortgage and Housing) forecast last year that unless 22 million housing units were built by 2030, there would be no alleviation of the lack of supply in Canada. So: few housing units and increased immigration...sounds like a recipe for price increases, in foreseeable future. Hmmm.....
It is interesting, when looking back to previous serious recessionary times, that real estate usually softens a year before other indicators point to such outcomes. If so, that would put 2022 as the softened year in real estate. From early March to early December, 2022, the hesitation in buyer activity did see some dramatic price reductions, to try to jumpstart sales action. In most cases, these reductions did not result in either more viewings or in sales. When a buyer is treading water, it means a period of inaction. Real estate also often recovers sooner than other lagging sectors.
Unusual Active January
In early 2023 (January, often a quiet month), it became active again (working around bursts of winter weather, of course). Sales of some properties that had been listed over a year, and with reductions that had been ignored, suddenly took place. As we enter the very beginning of February, inventory remains extraordinarily low.
Owners do not want to be sellers, it appears, unless they have to. To own a property in a unique area, where the Islands Trust form of governance effectively capped growth (in 1974), may be seen as a stalwart investment...a hedge against inflation and currency pressures. Buyer choice remains limited. By April, media reporting may be highlighting this renewed buyer activity and the lack of listings. More information? Contact me (firstname.lastname@example.org).
A Time of New Possibilities
We are all prisoners of our time...this current time period is full of unknowns and uncertainties and this does create hesitations. It may also be a time of new possibilities. Ever more important to sharpen up our editing skills. We are all swimming in a sea of raw data...making sense of it is a task indeed.
February is a good month to read, listen to webinars and podcasts, attend investment seminars, to glean bits of wisdom to guide us, to take the information in and then to see what makes sense individually. Also important to keep up to date on AI discoveries...things like ChatGPT could be serious game changers for our era. We are now all, in a way, our own experts. Important to trust our own inner editor.
Meantime, it's inspiring February. Early flowering shrubs, snow drops and crocus bulbs are up, early daffodils in protected areas are smiling hello. Remember to get out and about in the natural world. In our digital universe it is ever more important to really "see" our companion natural environment. Walking meditation is a lovely entry to such appreciation.
February...an invitation to softer days, lighter days, and all that an early Spring promises. Enjoy!Tel: 1-250-537-7647