Real Estate Report: Don't Hold Your Breath

'The Times They Are A-changin' - Bob Dylan - I still get emails from people saying they expect prices to start going down. I hope they aren’t holding their breath. As a realtor, making an announcement that demand is high, supply of listings is low and that will generally equate to higher prices is a double edged sword. Buyers have been in wait-and-see mode for a long time. That is over. The other side of the blade is sellers who overreact and overprice their property can lead to stale listings rather than the bidding wars they want. Prices seem to be rising but if you want 2 years from now prices, wait 2 years.

There have been announcements about prices in Victoria being up by 15% and people ask if that is the case on Salt Spring. We still have too small a statistical number to clearly define that but the gut feeling is yes, prices are up. How much is almost impossible to answer as you would have to have a number of identical properties sell last year and this year to make that firm report. Salt Spring is a reflection of the general Victoria are market and the graph below tells the story best. As Realtors ®, we noticed things changing last year. This year even more so. The sales to listings ratio is out of balance and inventories are shrinking. That means if it is an attractive property and reasonable priced, it will sell quickly. This puts off-island buyers at a disadvantage. The buyer from Calgary or Toronto or even Vancouver can’t come over tonight and view the property. If they wait until spring break to come it might be gone by then. We have seen that in several cases already this year.

The best analogy I can come up with for properties on Salt Spring is by comparing it to a restaurant with a very large and varied menu. There may be similarities but every item is different. The trick is that there is only one of every item on the menu. If someone orders the penne pasta with garlic prawns, it is gone. You may be able to get penne pasta with lemon prawns but the garlic prawns are gone. The same with properties on Salt Spring. They only made one of them and when it is gone, it is gone. If you can’t decide you may end up with Kraft dinner. ( not that there is anything wrong with Kraft dinner), just sayin.

The only stats I will quote is the sales to date for the last 3 years. From Jan 1 to Feb 1 in 2014 there were 14 sales. In the same period in 2015 there were 26 sales. In 2016 for the same period there have been 35 sales. In that period in 2014 there were 80 new listings. For the period in 2015 there were 67 new listings. For that period this year there have been 57 new listings. That’s the trend the graph below shows.

Salt Spring - Real Estate Report - 201603

PS: I just came back from New Zealand and Australia- many listings are posted as “ By Negotiation”. No price. Offer what you think it is worth. Another method is by auction. You get a few hours to view the property then it goes on the auction block. There is no MLS so no way to compare what you are looking at with other properties. Camel trading at it’s best or worst.

Salt Spring Exchange - John Cade - 2015John Cade, Pemberton Holmes Salt Spring Island

March 8, 2016 1:52 PM