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Current Market Conditions
Copyright, Li Read, 2007
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We seem to be in the middle of a moment of confusion, as markets are being micro-analyzed,
with almost minute by minute "prognostications" about "the trend".
Insecurity breeds fear, and fear can often accomplish a richochet effect -- up/down,
up/down, up/down. Inflation? Deflation? Depending who you listen to, it's one or the
I note in real estate listings, on the Gulf Islands, including on Salt Spring Island, plus
in Vancouver Island communities and on the Sunshine Coast (the "coastal grid", thus), that
the listing inventory remains quite "thin".
As soon as a potential buyer asks for a specific item (up to $500,000, say, with an
oceanview, and three bedrooms, as one example), then the inventory shrinks dramatically to
just a few options.
It may look like there's a lot for sale, initially, because of signage, but in secondary
home and rural areas, where daily newspapers are not a factor in advertising, signage can
be the main way to alert a buyer that something is for sale.
When the buyer's wish list is factored into the available inventory, it becomes clear that
there isn't a lot of product out there. Most owners prefer not to be sellers, then, unless
they "have to".
In secondary home marketplaces, though, such as on Salt Spring Island, we have a buyer
profile that is mainly from "elsewhere", and they are initially looking for something they
can use, now, in a summer/weekender fashion, but also with an eye to future retirement
(which might be two to five years away).
It's come to the attention of most major companies that such "soon to be retirees" will
pay more for their secondary home experience, now, than for their primary residence --
they see themselves in the new location, in pretty short order.
However, these future retirees can go anywhere -- the whole coastal space is of appeal,
and it's a trend, right now, that such out of province/out of area buyers will "interview"
a region, before looking at property in that location.
It generally takes two trips, then, and usually three, before a sale will take place, as
that first visit is more about checking out the area than about viewing a home or property
in it, and the second visit is when this discretionary buyer will view options.
Underlying this "seeking for a secondary home/future retirement" space, though, is the
fear and indecision surrounding financial issues, right now.
The stock market is not seen as a safe place to be investing one's capital. Currencies are
in disarray -- whose currency? How much is being printed? What is backing it? Are banks
To preserve capital, then, there is continuing interest in investment in hard asset
vehicles -- a real estate purchase in a protected area is seen as valuable, then.
Values may go down, short-term, but over time a real estate purchase does increase in
value, especially in areas such as the Gulf Islands (where the Islands Trust has capped
growth, through strict zoning/density controls), and in other coastal areas where there is
limited available land (Victoria is circumscribed by ocean and mountains, and many
Vancouver Island communities are also hemmed in between mountains and the sea (there just
isn't a huge amount of available land, for development). The same is true on the Sunshine
Over time, then, one will see values rise, as the global buyer, also a factor in real
estate transactions, now, continues to choose communities in this wonderful Pacific
Northwest Coast area.
We offer beauty, a pristine quality in a natural environment, some of the best
sailing/boating waters in the world, ease of access to major centres, yet a feeling of
being "apart" (though not isolated), and with a great climate.
Salt Spring Island & the Southern Gulf Islands answer the above description!
See Li for more information on how you can benefit from today's conditions, whether
selling or buying. In change, lies opportunity!
Call Li at Re/Max Salt Spring (1-800-731-7131) or email Li at: email@example.com
Awaiting your call!
RE/MAX Housing Market Outlook 2008
"Slow and steady growth forecast for residential real estate in major Canadian markets in
2008, says RE/MAX Canadian home sales to top 500,000 in 2007.
After posting extraordinary gains in 2007, housing market performance will moderate in
most major Canadian centres in 2008, according to a report released today by RE/MAX.
The RE/MAX Housing Market Outlook 2008 examined residential real estate trends in 18
markets across the country. The report found that while economic prospects will continue
to improve next year, few major markets are expected to exceed record sales levels set in
2007. Winnipeg, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Ottawa,
Sudbury, Saint John, Halifax-Dartmouth, and St. John's are all predicted to buck the trend
in 2008, with appreciation ranging from one to seven per cent. Average price is forecast
to increase in 78 per cent of markets surveyed next year, with the lowest price increase
expected in Edmonton and the highest in St. John's.
Nationally, the number of homes sold is expected to break through the half-million
threshold in 2007, climbing 13 per cent to an estimated 545,400 units, up from 483,770
units one year ago. Average price is projected to appreciate nine per cent to $303,000, up
about $25,000 over 2006 levels. In 2008, home sales are expected to retreat to 500,000
units while Canadian housing values are forecast to continue their ascent, rising six per
cent to $321,000.
Clearly, economic prosperity has translated into increased housing sales and upward
pressure on prices across the board. The country's economic engine fired on all cylinders
throughout the year, despite dire conditions south of the border. As in 2007, inventory
will be the major wildcard next year-the ultimate variable most expected to influence
housing market conditions and performance. A return to tight market conditions could mean
all bets are off as buyers are forced to compete, creating increased market pressure.
Major market frontrunners for price appreciation in 2008 include St. John's (12 per cent),
Regina and Kelowna - Central Okanagan (nine per cent), Hamilton-Burlington and Saint John
(eight per cent) and Greater Vancouver (seven per cent). Leading the country in sales
growth next year will be Kitchener-Waterloo (seven per cent), followed by
Hamilton-Burlington, London-St. Thomas, Sudbury and Halifax-Dartmouth, each forecasting a
five per cent gain.
Higher mortgage rates and increased inventory levels failed to materialize in most major
centres, making 2007 a record year for real estate activity in Canada. By year-end,
housing values across the country are expected to shatter existing records. Serious
double-digit increases in average price are forecasted for Saskatoon (49), Edmonton
(31.5), Regina (21), Calgary (20), Sudbury (20), Kelowna (19.5) Saint John (17), St.
John's (12), and Greater Vancouver (10).
Saskatchewan dominated real estate news in 2007, reporting some of the highest percentage
increases in unit sales. The number of homes sold in Regina by year-end is expected to top
35 per cent, bringing sales to an estimated 4,000 units. Neighbouring Saskatoon is
forecast to climb 28 per cent to 4,400 units in 2007. Other centres expected to post
double-digit gains in activity include Saint John (19 per cent) Kitchener-Waterloo (13 per
cent), Halifax-Dartmouth (12 per cent), St. John's (11 per cent), and Toronto (10 per
Western markets were first out of the gate in 2007, but those in the East followed suit.
By year-end, some of the most impressive gains in home sales will be realized in Ontario
and Atlantic Canada. Solid economic fundamentals, including billions of dollars in capital
projects, a positive unemployment outlook, and solid consumer confidence levels will
propel markets forward. A slow and steady growth trajectory, minus the peaks and valleys
experienced in 2007, is forecast for next year."
RE/MAX of Western Canada (1998) Inc. Housing Market Outlook 2008 Report
issued October 17th, 2007.
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, Toll-Free 1-800-731-7131