|
Copyright, Li Read, 2010 January, 2010. Here we are, striding into a new decade, never mind a "New Year"! In the Chinese zodiac system, we are also entering the Year of the Tiger. It's a year of turbulence, change, plus enormous opportunity...so it's important to keep one's focus and to pay attention to the 'surround sound' of one's life. The Chinese New Year begins, this year, on February 14th. Interesting, that this is also Valentine's Day, the day that celebrates love.... My December market analysis was divided into "past", "present", and "future": here's a repeat of my "future" thoughts.... The future: The media, which reported horrendous gloom in Fall, 2008, suddenly switched to euphoric reporting by Summer, 2009. The reporting made it sound like all real estate had suddenly bounced back. Not so. It was only busy in that "beginner" segment/or investor-rental category. This still appears to be the case. It remains slow in the upper end properties, and few raw land sales take place. Commercial sales are also very slow. Meantime, gold and commodities are the flavour of the month in the equity markets. Interest rates remain low. Government bailouts continue. A fear that currencies are under attack, and that hyperinflation is on its way, may encourage further real estate purchasing -- hard asset investment simply as a means to preserve capital. With significant price reductions continuing to somersault through the upper end properties, and continuing worry about preserving capital if cash is the next bubble, and with continuing low interest rates, we may see buyers deciding to get off the sidelines, out of cash positions, and into purchases in the upper end residential and in the raw land segments. This may now be seen as "where the bargains are". Certainly, all properties are more affordable, and buyers may deliver a significant further price reduction at the point of the offer. If the seller is seriously for sale, they will have to accept. It does appear that an international buyer may be back, looking to pick up estate style holdings, at prices that might be half what they were valued at, two years ago. This is a feature of all areas in North America, so there it is again -- real estate trends are increasingly global and regionality seems to have been erased by the indefatigable search engines. As the "real" 21st Century continues to evolve under our feet, with its on/off, act/react instantaneous world, we are getting more nimble at living with uncertainty. So important to keep practicing peripheral vision, though, and to fight against tunnel vision. Just stepping back a few paces allows that more panoramic view, and thus the creative solution can spring forward. In times of shift/change, there is enormous opportunity. As humans, we have a creative sense that is both entrepreneurial and positive. Fear inhibits. A cautious optimism can reinvent. As we float into 2010, with all its challenges (early days of societal shift are always challenging!), let's meet it with an open-handedness and a willingness to explore new ways of dealing with change. I always like that Buddhist challenge: "start where you are". I wanted to repeat the above tail end of my December market analysis, as it sums up what I feel about the opening moments of 2010. We are in the middle of a huge shift in the real estate industry itself, never mind the economic meltdowns that occurred in the latter part of 2008, and which shaped the uncertainties still evident in 2009. The internet erased time and geography. The "global village" promised by Marshall McLuhan, back in the 1960s, has now come into being. The buyer of a property, then, can come from anywhere. A key issue for listing agents and sellers is to discover how to make sure the buyer "knows" about the property for sale. Since buyers are the ones who create markets, sellers need to realize that things will sell for more than intrinsic value and for less, at any given time. The buyers desire to "act" in a transaction is what drives a market trend...supply and demand are a part of the equation, of course. Now, though, properties on Salt Spring and on the Southern Gulf Islands are in competition with properties around the globe. That buyer living in London, or Vienna, or Singapore, or Sidney, or San Francisco, or Calgary, or Vancouver, or...you get the drift!...that buyer can purchase anywhere, and so it's essential to be "seen" by them, so one is at least on their shopping list. In the end, however, the buyer will decide on area first, on house second, and the reasons for and against a successful sale can be quite emotional. As usual! The busyness reported by the media, in 2009, was mainly in city/primary residence areas, and mainly in the entry level property options/investor-rental categories. The busyness did not spill over into rural areas, such as in the B.C. Interior, or on the Gulf Islands, or to the small towns on Vancouver Island or on the Sunshine Coast. A seller, then, with a property valued at more than a million might have wondered where all these buyers were, that the media kept reporting on. The main sales in this local area were under 450,000. Isolated sales in the higher end were niche opportunities, one offs, and these always find a buyer due to their rarity. We may see a trickle up effect start to build in, throughout 2010, however, as people begin to think about restructuring their portfolios, getting out of top heavy cash positions, and making low offers on significant properties (especially while interest rates remain so low). Interest rates will not hold these low levels; already the Canadian government is putting buyers on alert that they are requiring more down in a purchase situation. They do not want defaults to occur, when interest rates rise. (I wonder how many people notice that high interest rates do not stop real estate sales...does anyone remember the days of 16%, 18%, 22% mortgages? It happened in the 1980s. A fear of inflation drove the market upwards. Will this be a scenario of 2010/2011? Perhaps...). Meantime, we need to remember to practice the attitude of gratitude for all the benefits in our lives, starting with paying attention to our "nearest and dearest", to remembering to walk, to breathe, to enjoy nature, to sip tea instead of gulping coffee, and to be there for our communities...in troubled times, we need to stretch out the helping hand. In change lies opportunity...here we are, entering a new decade, a new year, with the upsets of the past two years of economic chaos behind us...new technologies delivering new ways to get our messages out...it's ok to be a little nervous, but even better to be hugely enthusiastic! All of us, as individuals, can effect change today...it doesn't matter where we live. "The medium is the message" was another of Marshall McLuhan's dictums, from the 1960s. We'll hear a lot about social media marketing throughout 2010. New ways to share information do change methods of same, but good business practices remain as the ground we walk upon. Looking for excellence in knowledge of Gulf Islands properties, both of inventory and of market trends? I look forward to connecting you with your special Salt Spring Island or Southern Gulf Islands property. How may I help you to buy your Salt Spring Island or Gulf Islands dream property? With access to all listings, I will make certain that you "see it all", as a buyer, so that you will be in a position to make that all important "informed decision". The Islands Trust has created a "protected investment" area, by having capped growth on the Gulf Islands. Call me, and find out what that means for you. Looking forward to your call! liread33@gmail.com 
|