Copyright, Li Read, 2009
Well, here we are, travelling into the second half of the year, and also into our main "grid of activity" (August/September/October).
Oddly enough, year after year, regardless of market trend in play, the main sales window in this secondary home/discretionary marketplace, on Salt Spring Island and on the Southern Gulf Islands, is always August to early November.
Viewings may have taken place in the Spring, but the main sales don't "lock in" until the second half of the year.
This may be because the buyers look earlier, but they're also looking in other areas. They have to "choose for" Salt Spring or another Gulf Island, and they don't usually do this until they have checked out the competing areas on Vancouver Island and on the Sunshine Coast. The buyer wants "to be sure", of course.
It always takes two to three visits, it seems, for a buyer to choose a particular island, and then a property on that chosen island, and it seems that the offers begin to arrive in this late summer/early Fall timeframe, even though viewings may have taken place earlier.
Sometimes, the viewings may have taken place in the previous year!
It can take two plus years to sell any property on a Gulf Island, including on Salt Spring, the largest and best serviced of the Southern Gulf Islands. It's not related to price point or to property type, but is simply the outcome of being a discretionary area, and in such secondary home marketplaces the buyer is in control of the "where" and the "when" of all transactions.
In a downmarket moment, (such as that experienced from late 2007 and throughout 2008), a purchase in our secondary home market can be put "on hold".
This year, though, we seem to have fought our way out of the 2007/2008 "meltdown". Since early Spring, the main action has been in the low end residential, with little interest in undeveloped land or in higher end residential.
As of late July, though, we are finally seeing a slow upticking in price ranges, and properties just over a million are now finding "interest".
It may be, then, that the higher end residential options will begin to find their buyer profile, in this late season time period.
At the moment, there have been three recent waterfront sales, two on Salt Spring and one on Galiano Island, and all three have sold at 1.8 million. They were listed higher (1.895 for the two Salt Spring options, with the Galiano offering having been listed at 2.6 million), but the buyer was willing to step to the plate at the 1.8 figure.
In the main, however, the sales have been in the "below 700,000" range, and most have been below 425,000 (all Canadian Dollars).
This interest in the lower end residential has also been a characteristic of the primary residence/city markets, too. There, low interest rates, first time buyer "help" at the government level, and price reductions from sellers all achieved a "hot market" moment, starting in late Spring. The listing inventory had remained low, as most owners didn't want to be sellers, unless they "had to". In the city markets, then, there have been multiple offers.
It is rare on a Gulf Island to see multiple offers, but the same low inventory remains a factor, and a buyer may have to come closer to a seller's price point, as the market trend continues to solidify, to achieve a purchase. In the "under 600,000" range, this has already occurred.
A major real estate franchise noted, in mid-July, that the buyer's market is over. They based this on the low inventory and the resurgence of buyer interest, mainly in the low end residential, and they were reviewing sales stats from Vancouver and Toronto.
This kind of buoyancy is not mirrored in a secondary home marketplace, but it is clear that we are seeing renewed interest from our traditional buyer (Alberta and Ontario, if Canadian, and from the U.S. and the U.K.). The Gulf Islands, including Salt Spring Island, do not have a "local market", at all.
It may be, then, when looking back, in the next few months, that one will agree that "the bottom" in the market occurred between October 2008 and end of January 2009.
The reasons for the renewed interest in a real estate purchase could have more to do with preservation of capital concerns. So much paper money having been printed, with little to back same but more paper and a government -- a fear that cash itself, then, could be the next bubble. The fear of hyperinflation is also a factor.
No one has a roadmap, that's certain, but the real estate markets are picking up. Sales are occurring. Prices have been reduced, and the buyer has been delivering a further reduction at the point of an offer.
The buyer remains in control of the process on a Gulf Island, as no one "has to" act in any particular timeframe, and there is still a lot of residual uncertainty "out there".
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