March 9, 2009.
It's interesting that we have seen a flurry of activity, in showings and in some offers, in the residential low end of the marketplace, on Salt Spring Island, since early February. Apparently, this mini surge in showings activity, some few offers as a result, is also a factor on Vancouver Island and on the Sunshine Coast, and in Vancouver/Victoria.
I've noted, over the past several years, that Salt Spring and Gabriola Islands, for different reasons, I'm sure, show a marker of activity before the other Southern Gulf Islands would see it. It seems as if Galiano, Mayne, Penders, and Saturna, and Thetis, are a couple of months later in their "starts".
During the past two years, there was little action at this time of year. I always think that March Break shows a characteristic that will be mirrored by our "summer season" activity. In both 2007 and 2008, March Break was very quiet, and so were the two summer seasons.
This seems to be about to be different, this year. March Break is promising to be busy, for Salt Spring, again mainly in the lower end residential category.
The media continues to report very gloomy statistics, and that's what we need to remember -- they are statistics, based on the past finished business.
Thus, when real estate boards share statistics, they are reporting on events from 90 to 120 days previously. The realtors in the field are experiencing the "now", and this is why appraisers call realtors. They want to know about "right now", not what happened "before".
From about April, 2008 to end of January, 2009, it was absolutely "flat". Torusim was down, too, in the summer of 2008. It might have been as a result of high gas prices or a Canadian Dollar at almost par or...I think, myself, it was about fear. A fearful person just "stops", and all of that collapse going on in the stock markets, in the financial sector, the freezing of credit, the imploding real estate markets in the U.S., etc. etc. etc., caused a total lack of action. Endless & repetitive cable news reporting put many people on "overload".
A lot of people did lose a lot of money, and that meant cash erased from the system. On the other hand, a lot of people were "ok", and were resting in cash, in their portfolios. The old adage was: cash is king. In a deflationary moment, that is true. Prices come down, in a demand destruction mode, and people with cash can pick things up, at good prices. However, they weren't "acting". It was still a fear moment, of total "pause".
Then, with all that printing of monies, in all currencies, for all these global bailouts,a new fear began to be created, a fear that cash itself might be the next bubble. With nothing backing same, except a govenment, and with financial institutiions still "shaky", some saavy investors began to look at viable and protected hard assets again, with a view to preservation of capital. This might be why inventory wasn't building up in the housing markets; yes, demand down/foreclosures happening, but for those people who didn't "have to" sell, they were "holding". Sales volume down simply means buyers don't want to act. There didn't appear to be a corresponding rush to be a seller, though. Inventory remains remarkably low, then, as buyers continue to worry and to wonder.
So, low interest rates, a lower Canadian Dollar to attract U.K., and U.S. buyers again, a limited inventory, a worry that cash itself could falter/banks could fail, and a seeking to preserve the nest egg during a time that seems to have no rule book attached to it, to solve global problems...maybe those are reasons why people are back looking, at a second or third home property.
It's good news that the lower end is experiencing this strength...it is the foundation of the market trend, and it has to show strength before we will see this continue up to the high end opportunities for sale. A lot of very positive indicators, then.
The proof is always in the pudding, and we need these viewings to translate into offers and then into completed sales. In some cases, the buyers are lowballing, way below current market trend would encourage, and sellers don't always say yes. That's why I'm waiting for the completed sales picture to fill in.
It's still a mixed moment, no doubt, but there are positive signs, and these will end up being reported by the media when we hit late April/early May. They are never in the "now".
More info? Just call! How may I help you to buy your special Island property?
Li Read,
Managing Broker,
Sea to Sky Premier Properties (Salt Spring)
# 4 - 105 Rainbow Road, Salt Spring Island, B.C., V8K 2V5
250-537-8763
liread33@gmail.com
How may I help you to discover special Salt Spring Island & the Southern Gulf Islands? Call me!
