Copyright, Li Read, 2023
January...it starts with resolutions. There’s something about that blank palette at this very beginning of the month, in this introduction to a new year. We want to shape ourselves up. A new year invites change. Change offers inspiration and also brings uncertainty. A mixed bag. The beginning of January is also full of forecasts for the new year...investment suggestions are at the forefront. The key question: how to be safe? .
And what about specific real estate forecasts?
For Salt Spring and the Southern Gulf Islands, it always seems that the last two months of the preceding year are similar to the first two months of the new year.
Looking at late Fall, 2022, then, we noted that the listing inventory continued to be very low. Properties below a million tended to be strata options or small homes/cottages (most needing renovation or rebuild work). There were quite a few residential listings between one and two million. Sales were mainly below the million mark. A very few sales took place between 2 and 3 million. That “middle” person price category of one plus million seemed to have softened by late 2022. Was this a result of rising interest rates?
Arriving at the beginning of the new year, we note continuing low inventory. Prices have seen downward pressure since late Fall, and this may continue in early 2023. Price reductions do not always trigger viewings or offers. If a buyer is reluctant to act, they will tread water, seeking some market clarity. Most buyers continue to be from Vancouver and the desire to drop urban and seek rural remains a propeller of action.
It’s a good idea to attend investment seminars, whether in person or by webinars/podcasts. No one really has a definitive blueprint in this time of shift, but it’s good to let information pass through us...something that speaks to us will jump out. Be listening.
I found it interesting that some major National real estate brands were surprised that very little inventory came onstream in late 2022. They had thought the interest rate rises would have led to a spill-out of listings. However, if they can, it appears that most owners are choosing not to be sellers.
The Canadian government is seeking 1.5 million immigrants by 2025 (that’s 500,000 new arrivals each year, starting in 2023). At the same time, the federal government is banning foreign purchases for two years...starting January 1. Mixed messaging?
As long as supply is low, it seems to promise price stability in real estate markets. CMHC (Canadian Mortgage & Housing) noted in 2022 that 22 million dwellings would need to be in place in Canada by 2030, or the lack of housing problem would not be addressed. Add in that real estate keeps pace with inflation, and may protect from currency issues, and it seems that stability in real estate, especially in unique and beautiful places, may continue.
The very beginning of January is too early to make any significant projections about local real estate markets. Impacts of government taxation measures, interest rate rises, lack of supply, concerns about impending recession, continuing inflationary pressures, questions about currencies...one cannot ignore these global concerns. Locally, it always takes until March Break in the Gulf Islands to see the possible tone of this new calendar year. Continuing low inventory will be key. Stay tuned.
Meantime: it’s the beginning of January. Time to enjoy the softer season on the Gulf Islands. There are always things to see and do...and every day is that little bit lighter and longer. Meteorological Spring begins on March 1st...a hop, skip, and a jump from January 1st.
So, time to hike and walk the trail systems, to do some early spring cleaning, to sort files and spiff up the office, to keep up on projections, to meander the art galleries (to inspire one’s soul), to do lunch at our great restaurants and ponder the views (important to support local), to take 5 as the great Brubeck played...and to simply be. A fallow field moment is always restorative. A time out.
It’s January. Enjoy!
The first of December is considered meteorological Winter, although the calendar says it begins on the 20th. The great Pacific Northwest Coast experiences shorter days (dark by 4:30 p.m.) and every year is slightly different, weather-wise. This year promises snow and arctic cold. I prefer the usual rain that has our west coast location often described as “the famously wet coast”. (I am allergic to snow at sea level).
Lots of art gallery openings and receptions in December, plus the annual WinterCraft at Mahon Hall until the 23rd, the annual Beaver Point and Fulford Hall craft fairs (December 2 to 4), and other loved pop-ups...closed for two seasons due to covid closures, these displays of artistic flair are welcomed. ArtSpring offers choral/seasonal concerts...check out the website for dates. Enjoy the lights in the Village, and the decorated shops. Tasty special menus at coffee stops and restaurants...decorated farm gate stands encourage a jaunt around the island. Live music venues (Moby’s, the Legion) are fun. Check out the Christmas on Salt Spring events (the Chamber of Commerce website or Visitors Centre). Does Santa really arrive by floatplane?
Close to major centres and yet wonderfully apart...a visit to a Gulf Island/to Salt Spring Island can be a restorative and peaceful experience at this softer Winter season.
Real estate at this end of the year time is still consistently chugging along. Buyers remain interested and active. Snow storms mean some delays for some viewings, but Winter does not last long in our region. Inquiries remain strong. Winter is often a weekend business in a secondary home market. The lack of inventory remains a factor. The desire for a buyer to leave the city and to live in the country is still the main reason for activity. That authentic internet connectivity allows this profound lifestyle change. A softer gentler lifestyle seems to be the goal. A very human need: to be safe.
The governments (provincial and federal) are attempting to solve the lack of affordable housing supply through taxation (offshore purchase taxation, empty home (speculation) tax, moratorium on non-Canadian buyers, interest rate rises), and yet the federal government is also looking for 1.5 million immigrants by 2025. CMHC has forecast that 22 million housing units would need to be in place by 2030, to solve this “lack of housing” crisis (not including immigration pressures).
First time buyers are affected by the series of interest rate rises. Some experts are forecasting more rate rises to come...others think not (possibly fearing societal unrest?).
Affordability is tied to supply...instead of taxing existing options, which does not grow supply, governments need to encourage construction...an entrepreneurial answer to supply and demand issues.
Meantime, real estate remains a solid hard asset investment (especially during currency fluctuations) and keeps pace with inflation.
December is a time to be thoughtful, a time to acknowledge traditions and to practice the art of gratitude. A time to create new traditions and to include those on their own in our celebrations. It’s fun to research other seasonal events and definitely important to have lots of candles, have a fire in the hearth, and to invite light into our homes. Maybe a year to reread Charles Dickens’ classic: A Christmas Carol?
Feasting is allowed. A pause is encouraged.
December...a time of joy. Good to partake.
November...the season of craft fairs and holiday events. Standard Time returns (Fall back, remember). Shorter days/longer nights...rain, rain/sun mix, golden leaves scratching across pavement, temperatures cooling quickly.
After a 90 day warm and sunny drought, with rivers and creeks so dry the spawning salmon could not fulfill their October cycle, everyone is glad to see November rains appear.
November also brings Remembrance Day...wear your poppy, and if on Salt Spring try to be at the cenotaph for this annual community tribute. Thank you to those who served.
What about the real estate market as November begins? Several years ago, Salt Spring and the Southern Gulf Islands became a Fall Market. Although basically a seasonless marketplace, with buyers arriving throughout the year, there are high point times for sales. Fall is one of them. Late August to year end can be busy.
2022 saw a “six weeks late” scenario. Spring was late (remember Juneuary?). The farming community noted that the growing season was six weeks later than usual. This flat-line “pause” seemed to be mirrored in real estate activity. The Spring/Summer market was a holding pattern.
If 2021 was the year of consistent sales and multiple offers, 2022 has been the year of “maybe”, from a buyer perspective. (Maybe I will decide to buy a property...or maybe I’ll see how things play out. What about interest rate rises? When will there be more inventory to choose from? Will prices go down substantially? Should I act now or wait and see? What about all the chaos globally? Supply chain issues? Wars and rumours of wars? Will renewal of covid shut things down again?). Worry is the background sound of 2022. Uncertainty can create pauses in action.
A series of substantial price reductions took place in late Spring/early Summer, but many of these reduced properties still remained without showings or sales. The six plus week pause in activity was not about price, then. Worry, worry, worry...and worry makes a buyer just tread water. A pause is not a correction.
Lack of supply is the key to market outcomes. The low inventory in properties for sale will continue. Inward migration is also a factor. The flight from urban to rural remains a principal driver of action. Time is a component in most secondary home sales, once again. Media reporting on all markets is always reactive, not predictive. September “reports” might be reflecting June...December will give the picture of September...and so on. The bottom line: lack of supply and desire to buy.
As buyers slowly digest the parameters of this softer marketplace, activity is filling in again. A desire to be safe, and to preserve one’s capital...these are strong reasons for a buyer interest in rural lifestyles. The authentic ability to work from home, via a robust internet, is a further stimulus to a rural decision. To be “apart”, as 2023 unfolds...with its suggestion of further upheaval...perhaps makes good sense.
So...November. On Salt Spring and the Gulf Islands? Catch the galleries and craft fairs...special and unique opportunities to “shop local”. Dine out at our amazing and varied restaurants...local produce & talented chefs. Hike the trails around the islands on the finer Fall days. Try a restorative spa ritual. Galleries invite one to enjoy the amazing artistic talent. Remember the value of taking time...a softer season reminds us how to “see”. Maybe join a choral group...or learn line dancing (yes, they still do this). Evening classes offer new discoveries.
Seeking your special Gulf Islands property? Benefit from my knowledge (of trends and inventory) and expertise (managing broker licence). Your best interests are my motivation. I look forward to hearing from you Li Read Email
Softer...slower...a different kind of rhythm. Salt Spring smiles its November hello.
October is beginning with a continuing long late summer weather pattern. The beauty of this harvest season is visible everywhere on the Pacific Northwest Coast.
It’s also the civic election time in B.C. (every four years), and it seems that all communities are seeing many people running for only a few seats...many more people are wanting to be involved than there are available spaces. Salt Spring is no exception.
Usually, civic/community elections are lackluster...it’s provincial and federal elections that capture attention. The community level is very important, as it guides the day to day lives of those who live there. Important to get out and vote. Be informed. Support the candidate that reflects your views. Those elected will be in place for the next four years. The Gulf Islands form of governance (Islands Trust) means each island votes for two trustees and also for a CRD director. Apathy is not a choice in 2022.
October is the Canadian Thanksgiving month...an authentic Harvest season. It’s the perfect time to be a visitor on the Gulf Islands. The micro-climate on these islands supports vineyards, wineries, cideries, farmers markets, and the park hiking/walking trails beckon. Galleries showcase the artistic culture that creates the ambiance of the Gulf Islands.
The real estate market? Low inventory remains a factor. Sales do take place in all price ranges. The frenzy market of 2021 is over, but buyer inquiries remain strong. Uncertainties create hesitations, but action is still happening. There are both price reductions and also new listings that come onstream with higher than expected pricings.
The key to all markets is supply and the flight from urban to rural remains a key demand motivator in deciding for a purchase of a country property. Increased interest rates do affect first time buyers, and hesitations/pauses in action are a feature, but sales activity remains consistent in many secondary home locales. More information on current listings and sales on Salt Spring Island, as the market evolves? Contact me for updates. Thank you.
Meantime: it’s October...a month for star-watching as the days shorten and crisper evenings invite us to watch our skies. The annual Apple Festival on Salt Spring, the Thanksgiving holiday weekend, the gallery openings and receptions, the ArtSpring events, the switch to Sunday races at the Sailing Club, the Saturday and Tuesday farmers markets, the olive grove and vineyard and apple orchard harvests and creation of new wines/new ciders...this is a time of beauty and the gift of restorative Nature.
The ease of the Fall Season is with us. Enjoy!
Tel: 1-250-537-7647 E-Mail: LiRead Email
Back to school always signals the end of summer, even though the calendar says Fall is not official till September 20th. In the great Pacific Northwest Coast region, both September and October can be harvest months of tranquil beauty.
Lots happening in September, on delectable Salt Spring: Fall Fair, gallery openings, ArtSpring presentations, live music and patio dining pleasures continue, dine with an inspiring view at one of our amazing restaurants (Auntie Pesto’s, Seaside, Moby’s, Salt Spring Inn, Treehouse, Rock Salt, Hastings House). Farm gate stands, Tuesday Farmers Market, Saturday Market...enjoy the agricultural harvests. Check into the Visitors Centre (a Chamber initiative) to find out what else is happening in serene September.
How about that real estate market? We all realize that 2022 is not the frenzy observed in 2021.
That said, listing inventory on the Gulf Islands remains low. The desire to leave urban for the rural lifestyle remains strong. Most buyers continue to come from Vancouver and they plan to live on the Gulf Island of their choice.
Salt Spring offers a year-round lifestyle: has a hospital, 3 elementary and a state of the art senior school, has 3 separate ferries (to Vancouver, to Victoria, to mid-Vancouver Island), and regular sked year-round floatplane service to downtown Vancouver and to the airport.
The form of governance on the unincorporated Gulf Islands is a provincial government body created in 1974...to “preserve & protect” the environmental beauties of the islands for the benefit of all B.C. residents. The Islands Trust resulting cap on growth means real estate will always be more expensive as there will always be a limited inventory. Add a frenzy market, as in 2021, on top of the Trust cap on growth, and you get the “over ask” scenario.
The immediate aftermath of overheated markets is generally a flat/pause pattern. The Spring / early Summer Market saw this pause locally in buyer action. Inquiries continued and some viewings did take place, but often there was no resulting offer. Reflecting this “pause” in action, we saw some substantial price reductions from some companies. These aggressive reductions did not lead to sales activity. The pause was not about price.
2022 may end by being characterized as a Fall Market, with sales taking place between mid-August and year end.
It’s important to think about buying a property as a place for personal enjoyment...that you will live there...and not as a type of market investment. Houses are places to reside. If you buy what you like, and resale enters the picture, someone else will also appreciate your choice. Always buy from the heart and not the head. Markets go up and down and go flat...sales continue, always. Timing can be different (slow, fast, balanced), but outcomes continue. To enjoy one’s personal space is the key.
So, entering September, we find continuing low inventory. Sales in all property types and price ranges do take place, but the rush to purchase has eased. Price reductions at the point of an offer are also taking place. One might call this a balanced market. Buyer interest in living in a rural environment continues. Working from home is still desired. The rush to buy anything/anywhere is over. Although interest rates are rising, and this does affect first time buyers, transactions continue.
More information on market conditions and projected trends? Call me. Seeking to sell or to buy a property on Salt Spring and the Gulf Islands? I look forward to bringing my knowledge, expertise, and experience to your benefit.
Meantime, beautiful September’s harvest season is here...enjoy.
Tel: 1-250-537-7647 E-Mail: LiRead33@Gmail.com
Something we know for sure: the 2022 real estate market is very different from the 2021 pattern.
Buyers have not lost interest in a Salt Spring or Gulf Islands property purchase.
The desire to experience the rural lifestyle, to be “apart” from city issues, to be self-sufficient, all remain as the base lines of such interest.
Buyers are hesitating on the way to making a decision. The bidding frenzy (for five months) seen in 2021 has long gone.
Fear is the archtypal inhibitor.
Rising interest rates, inflation impacts, supply chain woes, wars and rumours of wars, currency worries...these all create a safe haven seeking. Yet action can stall.
When to hold? When to act? Are prices going down? If I wait, will a seller be more inclined to listen to my offer? Is it a buyer’s market now? Uncertainty brings a treading water pattern.
Note: classic sellers market means few listings and many buyers. Classic buyers market means lots of listings and few buyers.
Listing inventory is rising very slightly. At the moment, there are still few available listings as soon as one separates out by property type and price point. There is not a large spill-out of property opportunities. Inventory is best described as still “thin”. Hmmm.....
Some owners are removing listings from the market; they are wanting to hold their Salt Spring and Gulf Islands assets. In inflationary times, real estate keeps pace.
Others, remaining as sellers, will counter at full price or close to it when an offer does come in. If their property has no competing parcel, then more than one buyer may come forward. This means the buyer still has to come towards the seller.
None of this sounds like a big market correction or a segue into a full buyers market. In a buyer considering an outcome, there are bound to be pauses. A flat line pause is not a downward spiral. So...in August (and summer is a slower season as people are on holiday) 2022, it can perhaps be described as a thoughtful market.
Thoughtful is good. It allows time for a buyer to do due diligence, to have subject conditions on an offer, to be satisfied on the purchase. It also allows time for the seller to consider right pricing. A seller once again needs to prep to sell at optimum.
Price is the only thing a seller is in control of. A buyer decides the where and the when of a purchase. It is always a two step dance between a seller and a buyer.
We may have to wait until the end of October to see the outcome of the 2022 summer season market. The entire year to date has seen a 6 to 8 week delay in many instances (weather, gardens, markets). 2022 is slower than 2021...perhaps it’s more like 2019 (pre-pandemic)...but it may not be the expected “correction”. Important to keep an eye on things, perhaps weekly. Change is just a part of the 21st Century surround sound...shift is with us.
More information on the current Salt Spring and Gulf Islands real estate market? Look forward to connecting with you.
For several years now (maybe 20+??), I have been offering up my market thoughts at the start of each month.
A surprising number of people both read and comment on same...and I am so appreciative.
Am in the midst right now of changing things up...how information is disseminated is changing (along with every other change that seems to be underway).
I will be back soon with continuing “thoughts”...for the moment, though, am not creating my usual first day of the month report.
Change, change...everywhere a change. I know the words to that 70s anthem.
Meantime: wonderful summer-summer is with us and it’s a short and lushly beautiful season.
Catch a ferry, get a seaplane...arrive by private boat. Enjoy Salt Spring’s summer pleasures.
July 1st...it’s the annual celebration of Canada Day. Summer-summer is with us.