As a Realtor, when I meet someone on the street, in a restaurant, in the bar, wherever, it’s a toss up whether the first question is “ How are you?” or “How about this weather” or “ What’s the market like?" The two most common points of interest are the weather and the real estate market for many. I get asked so often I feel like a YouTube video being played.
So here it is. 2016 was a record year for real estate sales on Salt Spring. It started out with a boom and never quit. Predictions were that 2017 would slow down. In the 1st quarter of 2016 there were (plus or minus), 78 new listings as compared to 51 sales. In 2017 for the 1st quarter there have been 54 new listings as compared to 49 sales. This is the continuing saga. Sales are down but in a large way because of the shortage of inventory. For the 1st quarter of 2016, the average time on market for the sold properties was 178 days (DOM). In the 1st quarter of 2017 that had dropped to 101 DOM. Of the 54 new listings in this quarter, 21 have sold already with an average of only 29 DOM. Some listings will always take longer to sell. Some sellers get all excited and overprice. Other properties are just unique and will take a very specific buyer which takes time to find.
The next question is of course "Are prices going up?", the general answer is yes. How much is a hard figure to be accurate about. Unless a statistically relevant number of the same homes sold in 2016 and 2017, it is only an educated guess as all properties are very unique on Salt Spring and the tastes of the buyers can change from year to year. What I can say is that of the single family detached homes sold in the 1st quarter of 2016, the average price was just over $550,000 and 9 were under $400,000. For the same period this year, the average sold price was $756,000 and only 4 were below $400,000. Of course we have to examine these sales and remove the anomalies.
If we remove waterfront homes, 1st quarter 2016 had an average price of approx. $525,000 and in 1st quarter of 2017 the average sale price was just under $694,000. That doesn’t mean prices have gone up by 32%. It means that besides prices going up, the buyers are looking for better quality homes. As I said, statistics can be deceiving. In 2016 the average lot size sold was just under 3 acres with an average 1976 built home of about 1883 sq ft. In 2017 the homes sold were getting closer to 4 acres with a 1982 built 2200 sq ft house. Bigger property, bigger and newer homes. Tastes change.
The underlying theme is a shortage of homes to sell. As of this morning there are 79 Single Family Detached homes listed. There would normally be around 200. Of those for sale there are only 3 under $400,000 and 12 under $500,000. This doesn’t mean prices have gone up that much, just that the lower end of the market has been sold already. This will bump the average sale price up but not the prices of the individual properties themselves to the same degree. Think of it like asking a Mercedes dealer what the average price of a car sold is. They would say around $80,000 where as the Kia dealer would say more like $35,000. If more people bought a Mercedes than a Kia then it doesn’t mean Kia’s went up by 200%.
These charts say it all ( of course previous years show all of April’s sales but April 2017 has just started).