Whispers of shift...rumours of change, in a slowly evolving upward direction.
In secondary home/discretionary areas, though, it's difficult to catch such tendrils. One sale, here and there, doesn't make a market pattern.
In my specific Salt Spring Island & Southern Gulf Islands region, the main sales are in entry level residential options...on one island, this might mean below $450,000, & on another it might mean below $700,000...big variation between islands in this grouping. Variation might have to do with amenities offered and ease of arrivals, but not always.
Whatever that "ceiling figure" might be, it is entry level residential that interests the still reluctant buyer.
Undeveloped land, even extravagant oceanview acreages or waterfront building opportunities, are not attracting buyers. Same scenario for commercial or business options...no interested buyer right at this moment. The high end pricings in residential choices are also very quiet...one sale over 2 million in 2010, and again this year, to date, shows purchaser reluctance in the upper tier priced properties.
In most secondary home/discretionary & resort-based areas, the pyramid of pricings is inverted from a primary residence area. In a city market, the base of a pyramid would be broad and the higher priced options would be the point of the pyramid. Imagine that reversed, with fewer entry level choices, thus the point part, and many more upper tier priced properties, the broad part...there you have it, as the image of a discretionary marketplace.
When the buyer decides to hold off on a discretionary buy, then a pause develops. Price reductions are attempted, but in the higher priced properties this doesn't jumpstart action. When a buyer says: I don't know, I'll think about it, they mean that. No one "has to" buy a second or third home, or a holding property, or a retirement option...these are all matters of choice, and at this exact moment in time, the choice is 'not now...later'.
This kind of hesitation dance applies to all discretionary purchases, of course. Fine art/gallery sales might be down by the same 30% that appraisers say our discretionary area has reduced (between mid-2007 and end of July, this year). Antiques, fine art, unique cars, destination vacations...these are discretionary choices...perhaps real estate sales in secondary home areas are the "canary in the mine"...the harbinger of change, whether up or down!
Consumer confidence is the key, of course. The latest round of uncertainties out of the U.S. affect economic decisions globally. Our post-Internet world is very 'connected'.
Fear of continuing currency instability, a desire to preserve capital, a seeking of a safe haven, the search to be self-sustaining...these may be drivers to action that are just now reaching the secondary home/discretionary markets, & globally so.
This desire may be coupled with being in year six of a seven year cycle...natural "lift", then.
What we can say: more people are around, the marinas are busier, "looking" is going on...and for first time in three years.
Whispers of change, then? Early days, but it is August and August/Sept/Oct/early November have always been the traditional sales pattern in our recreational area. Perhaps we're slowly returning to this?
Just my thoughts...and yours are? Always welcome!
If you are interested in Salt Spring Island/Southern Gulf Islands real estate, please call me. Successfully connecting buyers with sellers, since 1989, I look forward to bringing my expertise & knowledge (of both inventory & trends) to your benefit.
How may I help you to buy your special Island property?
liread33@gmail.com
How may I help you to discover special Salt Spring Island & the Southern Gulf Islands? Call me!
