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Copyright, Li Read, 2009 September, 2009. It's odd, but I always feel that September is the start of a new year, and that this calendar division between December 31st and January 1st is somehow arbitrary. It might be a result of the school system emphasizing that September to June grid, but Fall, to me, means a time of new beginnings. A very different kind of a year, though, since Fall, 2008 ushered in the meltdown, in almost every sphere of society. Certainly, things are very different now, in early September 2009, than they were in September, 2007! No one has been unaffected or insulated from the economic collapses. Many people lost hugely in the stock market crashes between September 15th, 2008 and close of January, 2009. The housing market collapse in the U.S., while perhaps not felt to the same degree in Canadian regions, nevertheless had a global impact. The old adage in real estate was always that it was a regional affair, and therefore one could not extrapolate out from area to area. The internet erased time and geography, among many things that it changed, and so this old axiom is no longer truly relevant. Markets are global, and that includes housing markets. Some places may be more attracting than others, at any given time, but no area is immune from global statistics now. Perhaps the main reason for this is that the commoditization of real estate, over the recent past, opened it up to a global purchaser, and so that expanded buyer profile affected all areas -- it's buyers that set markets, not sellers or realtors. The butterfly effect is felt everywhere...an event in Tokyo or in Shanghai or in Mumbai or in Los Angeles or in New York or in Frankfurt or in Toronto or in London or...you get the idea. We're all connected now. At the beginning of February, 2009, a "pick up" in sales activity occurred, in the low end residential offerings, and it appeared to do this globally as well as locally. First time buyers took advantage of price reductions and of low interest rates, first time buyer "help", and larger inventory to choose from. As this inventory cleared out, however, (and the price reductions such buyers delivered at the point of the sale occurred regardless of any previous reduction track), it became clear that inventory was not growing. So much paper money was printed, for all of the various bailouts, globally, with nothing backing same but more paper and a government, that people who had not lost their core positions, and who were resting in cash, began to be concerned about the validity of same. Was cash itself going to be the next "bubble"? Yes, an immediate deflationary trend was in play, but the threat of hyperinflation was lurking in the wings. The trick, of course, in all projections, is to call the "when". The very high end in the city/primary residence markets began to come into play, a few months after the lower end/first time buyer market became active. This was not mirrored, however, in secondary home/discretionary marketplaces, such as on the Southern Gulf Islands / on Salt Spring Island. No one "has to" buy a second or third home, and so we can be put "on hold", until the buyer is in a mood to act. Also, the credit crunch is still in evidence in secondary home markets, particularly when undeveloped/raw land is the item under discussion. On the Islands, then, there have been random encounters in higher end properties, usually niche options, and they sell for much reduced price points (in spite of reductions that took place before the point of an offer). It is still a very quiet moment for properties listed over 900,000, and very quiet indeed in properties over 2 million. The media reports are very euphoric, now. In the Fall of 2008, the media was gloomier than the reality, and now they are more buoyant than the reality. Their reporting makes it sound as if everything is rosy, but when one looks into the background of their reporting, it's clear that the multiple offer scenarios that can occur in a city marketplace are still in the under 800,000 price range, and most under 600,000. Although multiple offers are rare on a Gulf Island, it does appear that buyers are having to come closer to a seller's list price than in the early Spring. The reason for this is the same in both primary and secondary markets -- it's about a lack of inventory. Unless an owner "has to" sell, or has a desire to explore a plan B, then they do not want to become sellers. Where would I go? What would I do with the money? I might as well stay put. On the buyer side, with this concern over being top heavy in cash/wanting a good hard asset investment, it's the same dilemma. Where to buy? What to choose? Not enough choice.... The interesting aspect of a purchase on Salt Spring Island or on another Gulf Island is this fact that it's a "protected investment". Since 1974, the Islands Trust, a provincial government body, with the mandate of: "to preserve and protect the environmental beauties of the Gulf Islands, for the benefit of all B.C. residents", has ensured that there would be a cap on growth. More information? Give me a call! I have felt, as this year's sales rhythm progressed (slow but sure, and mainly in the low end residential still), that we would turn out to be busiest from mid-August through to end of November. A later and longer scenario, then, with a slow upticking in price points. The Olympics, in February of 2010, will introduce this beautiful coastal area to people, and it's very usual to find them returning for a closer look within 6 months or so. That means we may be back to a more regular sales rhythm, in our delectable region, by late summer/early fall of 2010. Isn't that when some forecasters are calling for inflation to be evident? Wish we had a crystal ball! The hallmark of a transition period is this kind of "mixed message" moment. How may I help you to buy your special Gulf Islands/Salt Spring Island property? I look forward to your call. liread33@gmail.com Li quoted in article on Canadian waterfront enclaves in Unique Homes Magazine. 
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