Salt Spring Island Real Estate Market Analysis

Real Estate Mid Market Update: Early 2025

Analyzing shifts in the Salt Spring Island real estate market.

Changing Market Conditions

Real estate markets are not static items...they change (and the shifts can be rapid), as different elements come to the fore.

2024 saw renewed sales in October, November, December...with projections for 2025 mentioning continuing low inventory and potential for resulting price increases.

Salt Spring Island

Salt Spring Island

Since then, the early days of 2025 have seen the prime minister stepping down, a Liberal party seeking a leader replacement, and an understanding that all this will result in a Spring federal election.

At the same time, the incoming president of the U.S., our biggest trading partner, appears to be serious about his 25% tariff hit for Canada. The premiers are not of one voice regarding response, and B.C.'s premier acknowledges that such tariffs would decimate the B.C. economy. Meanwhile, the absence of a leader/prime minister role federally means no unified voice for negotiations.

Markets do not like uncertainty.

These early days of 2025 are showing mixed signals, and it may take until late April or May to see coherent outcomes in real estate activity.

The diminishing value of the Canadian dollar might be one reason owners are not wanting to be sellers...as a way of preserving capital through a real estate investment.

The Bank of Montreal (BMO) is stating that real estate outcomes may not improve markedly until 2029. Different reasons are given. Again, projections and trends can change quickly in any market-driven sector, and these concepts are not static reports...it is opinion.

Meantime, low inventory & buyer reluctance make it difficult for marketing decisions by realtors...and various marketing venues are noting less uptake. The year has opened with unexpected shifts...always interesting.

Questions/comments? Look forward to hearing from you.

January 2025

Salt Spring Island

January on the Coast

Here we are, at the very beginning of a New Year. Past and future mingle.

Named for the Roman god Janus, a deity with two faces, one looking behind and the other gazing forward, January offers us both the immediate past and hopes for the future.

Real Estate Review

2024 closed with extraordinary and continuing low real estate inventory. Serious interest rate cuts did help to create renewed sales action in October, November, December. Prices stabilized. Projections for real estate were all suggesting that price escalation would occur in 2025 and inventory would continue to remain low.

It takes until March Break to see the tone of a new year, in our secondary home/recreational marketplace. What we do know: the low inventory means lack of choice for buyers. It encourages action when a buyer sees a possibility and it may mean having to offer close to list price or "over ask". It may also encourage the reverse, inducing a wait and see pause, similar to the outcomes in 2022, 2023, and early 2024. Stable pricing and lack of product do not necessarily create strong sales. Buyers can also tread water.

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Global Factors

So many global events and changes make it difficult to call projections. A low Canadian dollar against the U.S. currency may bring strong tourism from the U.S. The federal ban on foreign ownership (currently until January, 2027) makes it difficult for U.S. buyers to invest (once a strong buyer profile in all the Gulf Islands). There are many exceptions to this ban on foreign purchases...important to check into these.

Wars and rumours of wars persist. Diminished purchasing power of the Canadian currency is worrisome. The true effect of Artificial Intelligence has not been fully understood. A new president takes office in the U.S., and Canadian outcomes are often framed by decisions taken with its biggest trading partner. Pressure to call a federal election is gathering interest from the other parties. The provincial government has put off a legislative sitting until February, and requires an arrangement with the two elected Greens to offer governance.

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Navigating Change

Change, change...everywhere a change....yes, we can all hum away to this 1960s tune. January opens with significant shifts. Time to attend seminars and webinars on financial projections...time to listen a lot...time to value again the hard asset protections, the preservation of capital, offered by good real estate holdings.

If an owner, is it a time to sit tight? Unless one knows next steps, one might sell and then not find a replacement...becoming houseless is a real issue. If a buyer, is it time to buy what may need work, but will escalate in value over time? Younger buyers might be wise to consider "sweat equity" concepts. Or think about creative co-ownership opportunities. Thinking in-depth is a good way to navigate the first six weeks of a New Year.

Looking Forward

So, it's January...mid-winter in our coastal area. Every day is a few seconds longer and the slow march to Spring is underway. Tiny shoots of green are visible in protected corners of gardens and fields. It may look severe above ground, but at that root level it is busy getting ready for Spring's eruption. A good reminder that we have the opportunity to consider planning for changes, too.

It's January...time to segue into new things...at this truly New Year. And your plan is? Share.