Analysis
- 2010 Salt Spring real estate
- 2009 in perspective
- What does this mean for 2010?
- What sold above assessment?
lease click on or scroll down for these topics
2010 Salt Spring real estate activity
To judge the level of activity in the Salt Spring real estate market, we review the number of sales whose status changes from "current" to "pending" within the specific period. If the "subjects" contained in an accepted offer are removed, the offer becomes unconditional - and the sale is deemed to be "pending". Typically, that's the date when the "FOR SALE" sign becomes a "SOLD" sign. (The "completion date", on the other hand, is the date on which the property actually changes hands, when title transfers from the seller to the buyer.)
The pace of activity in the Salt Spring market seems to be fluctuating from one week to the next. But with sellers outnumbering buyers and in light of some uncertainty in the global economy scene, current conditions appear to be favoring buyers.
75 properties (with homes) on Salt Spring became "pending" sales during the first six months of 2010, for a total value of $44.9 million. Of these, seven sold for over $1 million. For the period to the end of June, the average sale price was just over $590,000; the mean (half sold above and half sold below this price) sale price was $440,000. These statistics are all higher than 2009 figures, but lower than the peaks of 2007 and 2008.
June's sales, totalling just over $9 million, was on a par with last year's sales for the same month. But in June of this year, we had two sales over $1 million in the month, and a total of 15 transactions (compared to 20 in the same month a year ago). Essentially, this year's sales activity is occurring across the spectrum of prices; last year, most sales were in the lower to medium priced categories.
Fears of rising interest rates and economic worries are creating some uncertainties for people thinking of buying a recreational or retirement property.
June was a pretty active month in the sale of bare land, as buyers sought to avoid additional HST on the purchase price of a development lot. A total of five lots sold in June, for a total value of $1.2 million. A total of 19 lots/acreages were sold in the first six months of this year, for a total of $5.5 million. (There were five sales of lots in the first six months of last year.)
At the beginning of July, a total of 315 properties (with homes) and 118 lots/acreages were for sale on Salt Spring.
(Is this a good time to list your property? Because of the many variables involved in that decision, I'd suggest we talk in person about your options, timing, and the market for your particular property.)
2009 Salt Spring real estate in perspective
For the 12 months of 2009
Here are a few year-end statistics, with some comparisons to previous years:
- Total sales for 2009 added up to $81.3 million; a total of 156 properties with homes changed hands. (This does NOT include the sale of land, or bare lots.) This figure for 2009 compares to:
- $104,761,200 in 2008 (152 properties)
- $136,665,666 in 2007 (234 properties)
- $87,033,300 in 2006 (163 properties)
- $107,046,286 in 2005 (202 properties)
For a copy of the full spreadsheet with these statistics and those from earlier years, please contact me.
- The mean price (half sold for more, half for less) for a house sold in 2009 was just over $420,000. In 2008, the mean price was $538,000, a significant jump from 2007 and 2006 mean prices of roughly $450,000.
- The average price for a house sold in 2009 was just over $515,000 down about 25% from 2008, close to average prices of 2005. That average may be a little deceptive because more sales occurred in the lower half of the market, than at the higher end. Also, prices at the higher end declined more, on a percentage basis, from the peaks of the year before, than did those at the lower end. This is, in part, related to the fact that more of the sales in 2009 came from local buyers, rather than retirees or purchasers from elsewhere in Canada and the US.
- In fact, 66% of homes sold in 2009 sold for less than $500,000, the highest percentage since 2005. As prices for homes on Salt Spring increased throughout the decade, this proportion had been decreasing -- from 87% in 2001 to a low of 42% in 2008.
- 10 homes sold for over $1 million in 2009, compared to 19 in 2008 and 22 in 2007. That number (10 for 2009) is just below figures for 2005 and 2006 but still well above sales in that category in the years 2001 - 2004. (An additional four contracts for sale over $1 million were written in the fourth quarter, which are due to complete in 2010, perhaps indicating a bit of an up-trend in that segment of the market.)
- "Averages" are sometimes not strong indicators of overall market activity and should not indicate trends in any particular segment of the market. But -- here are a few averages from the year. It took an average of 148 days for a house to sell in 2009. I've estimated that on average (after tossing out obvious anomalies) homes sold for 104% of assessed values. And on average, homes sold for $315 per finished square foot. A more meaningful measure would be obtained by segmenting the market and looking at the "averages" in each. (Watch for this analysis, shortly.)
- Sales in 2009 also tended to be mostly "local" (which includes not only local Salt Spring residents, but residents from Vancouver and Victoria, and the rest of BC) - with fewer buyers coming from the US and elsewhere in Canada, than in the peak years of 2006 and 2007.
What does that mean for 2010 on Salt Spring? There are many forces at work here. On the upside, the economic recovery, robust real estate markets in Victoria and Vancouver, and interest generated by the Vancouver 2010 Olympics could spill over to Salt Spring. There have been recent headlines suggesting an increase in US interest in Canadian real estate. (But with prices on US residential real estate assets falling, that may be a trend in commercial markets rather than in residential ones.) These positive factors may be offset in 2010 by the prospect of higher interest rates.
Still, overall trends, including the recovery of activity in the fourth quarter and the first two months of 2010, suggest that prices and activity levels have stabilized, particularly in the lower half of the market, after achieving peaks in 2007 and early 2008. I'll mention also a couple of obvious facts:
- Salt Spring remains one of the most highly desirable destinations in the world, and that's understating it. We live in one of the best places in the Best Place on Earth. On our doorsteps, we have unmatched natural beauty, a vibrant, interesting, eclectic culture, clean and gorgeous air, proximity to two amazing cities, sailing grounds that are some of the best in the world, and most of the mod cons of life in the 21st century.
- Not only because we are an island, but also because our development is carefully controlled, Salt Spring offers a finite resource. And the laws of demand and supply still work.
A review of homes that sold in 2009 for over 110% of assessment suggests:
- Taking the time to de-clutter and present a home well pays off handsomely. Well maintained, clean, tidy, uncluttered homes were among those selling for a premium to assessed value.
- This may be somewhat obvious, but quaint cottages and properties in some popular neighbourhoods also commanded a premium. Without naming them all, these neighbourhoods include Vesuvius, Booth Canal, Sunset Dr., Quebec Dr. and Old Scott Rd.
- Special features of the home or lot added to the value. These features include ocean views, the combination of a deep water dock and a beach, proximity to water, a home on a lot featuring trails and a forest, or a lot that lends itself to alternative uses or is an unusual size. Any number of features could qualify in this category.
What is significant about this is that ALL home sellers can control #1 -- how they present their home to prospective buyers. It DOES matter. And it IS worth taking the time to prepare your home for sale. (If you're going to be packing up anyway, why not do it now?)
On the flip side, buyers may get a better deal if they can overlook clutter, dated wallpaper, pink bathroom fixtures, or a paint color that's not to their liking, and can see through to the bones of a home and the potential!
More statistical analysis of market segments coming shortly. If you have any questions about your home, its value, and how you can enhance it/get ready to list, I'd be happy to provide a no-obligation consultation. Click here for my contact information.
