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Current Market Conditions
Copyright, Li Read, 2007
Return to Current Month
At year's end, it's a time to reflect on the past months, and to plan for the new business
that will begin on January 1st., of the new year.
A brief flurry of activity, in the low to midrange priced residential properties, between
February and April, seemed to signal the end of the "plateau period" (a global phenomenon,
throughout 2006, and termed "stable/inactive", by the Wall Street Journal). There were
some closings of "high end" properties in February, in March, and in May, although the
business that resulted in these completions may have begun earlier, in 2006. Undeveloped
land did not find its buyer, easily.
June is always a quiet month, regardless of market trend in play. July/August/early
September, however, were also quiet months. One reason for this may have been a reaction
to all of the noisy and constant reporting of the subprime mortgage issues & resulting
credit crunch. Fear makes people "hesitate", and although there were viewings taking
place, there was inaction about offers.
Then, around the very beginning of October, we began to see another flurry of activity,
mirroring that of the early Spring months. Again, it was action in the low to midrange
priced residential options, with lack of interest in undeveloped land. In October, there
were two "high end" waterfront sales, and another one in early November. Inquiries were
up, and people were arriving on a daily basis. Usually, in the late Fall/early Winter, it
becomes a weekend business, and not every weekend, either. This year, though, it's been
that daily activity usually associated with the summer season. Interesting!
There is no doubt that the credit crunch in the U.S. will have repercussions. It seems
that the banks are already tightening their requirements, and people may have difficulty
in getting mortgages -- this may affect first time buyers, especially. Even people with
good credit histories may find that the purchase of a secondary home/recreational property
will entail more difficulty than in past years. Whether or not it should affect us, here,
The currency is something to pay attention to, as well. The quick upswing in the value of
the Canadian Dollar caught everyone off guard. Salt Spring Island & the Southern Gulf
Islands are secondary home/discretionary marketplaces. When the Canadian Dollar went to
$1.08 against the U.S. Dollar, that discretionary buyer was considering purchasing a
property in the U.S. (Rumour had it that there was an oversupply and a market down by 30%,
for example, in the Phoenix area).
The Gulf Islands, including Salt Spring Island, are already competing for the attention of
that second home purchaser with Vancouver Island communities (with Parksville/Qualicum,
with Courtenay/Comox, with parts of the Cowichan Valley (Maple Bay, Yellowpoint, Cherry
Point, Mill Bay), and with some areas in "greater Victoria" (Sidney/North Saanich,
Metchosin/East Sooke). The Sunshine Coast (Sechelt area) is another contender.
The first visit to Salt Spring, then, is usually an "interview the Island" trip, and the
same interviewing function will be taking place at the above mentioned Vancouver Island
and Sunshine Coast communities. It's about deciding on the lifestyle offered, and that's
why it always takes two visits, if not three, before an offer is made on a property. One
has to "choose for" the Island, first. Time lags, then, are a part of every sale on every
Gulf Island, including on Salt Spring Island.
The buyer profile is not local; usually the purchasers are all from "out of province".
There are substantial time periods between their visits, thus, and it can take anywhere
from one to three years to sell any Gulf Island property, simply because it's a secondary
home marketplace. No one "has to" move to a Gulf Island, and therefore the buyer is in
total charge of both the "where" and the "when" of every purchase.
Sellers and realtors have to practice patience!
A volatile market, coupled with a discretionary market, can make the timelines even
longer. In having a buyer profile from somewhere else, the Islands are affected by issues
in that buyer's home territory.
The good news, though, is that the listing inventory remains exceptionally "thin". Most
owners prefer not to be sellers. This is a sign of a continuing "hard asset" investment
moment. The argument for inflationary times seems to be strong; how much money is being
printed, and what is backing it? We're back to the stability of currencies, then.
It's a time, perhaps, for a buyer to consider an investment in a protected area. Salt
Spring and the Southern Gulf Islands are part of the Islands Trust jurisdiction, and the
Trust's mandate of "to preserve & protect" seems to imply a cushion to investment, and
long term appreciation of a substantial nature. (See Li for more details on the Trust).
Looking for your special property? It could be that this will be looked upon as having
been a good time to buy -- sellers are motivated, as they can see unrest in various other
areas. Currency concerns could make a purchase, now, look very wise in retrospect. It
could be a tiny window for a buyer to achieve a property, at a price point convenient to
the buyer. See Li for suggestions on how to make this current market trend work for you!
"See Li for Successful Solutions!"
Contact Li at: Re/Max Salt Spring (next door to Calvin's Restaurant, in Ganges Village).
Email: email@example.com Phone/Fax: 250-537-4287
Looking forward to your call!
RE/MAX Western Canada : Slow and Steady growth forcast for residential real estate
BCREA Mortgage Update : 1 | 2
Entries for 2006
Entries for 2005 & Earlier
Contact Li Read at RE/MAX Salt Spring, 131 Lower Ganges
Road, Salt Spring Island, BC, V8K 2T2