Analysis
- 2011 sales stats
- 2010 Salt Spring real estate
- What does this mean for 2012?
- What sold significantly above assessment?
Please click on or scroll down for these topics
Real estate sales* in 2011 reflect the uncertain economic environment and a cautious market for recreational and retirement property in BC and elsewhere in Canada. The strength of the Canadian dollar and the affordability of US real estate continue to deter our neighbours to the south from investing in the southern Gulf Islands. Buyers' perceptions of both global and North American economics are causing them to defer purchases of hard assets and delay decision-making.
A total of 142 properties changed hands (became "pending" sales) in the year, for a total value of $76.9 million, below 2010 levels for the same time frame. The average price of a house sold this year was just over $517,000, below last year's average of just over $554,000.
In addition, 15 properties (bare land) sold in the year.
A total of 19 waterfront properties changed hands this year, ranging in price from $450,000 to $2.5 million.
Nine properties sold for over $1 million. This compares to 15 over $1 million in 2010 and 12 in 2009.
The market is still in buyers' favor - but a well presented, well marketed, and well priced house will still sell quickly in this market. The vast majority of buyers are insisting on full home inspections, including septic inspections (as well as water quality tests when a well is involved). Functioning septic systems and a source of proven potable water are musts for any seller to check before they put their property on the market.
There are buyers around, looking for realistic and motivated sellers and properties that meet their criteria, have desirable features and are priced appropriately. We "enjoyed" a brief bubble here on Salt Spring - with prices peaking in 2007 and early 2008; we likely won't see those prices here for some time. But we still live in the best place in BC on the best place on earth. The appeal of our wonderful island will continue to be strong for the longer term.
*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.)
2010 Salt Spring real estate activity summary
In 2010, a total of 161 properties (with homes) on Salt Spring became "pending" sales, for a total value of $92.4 million. Of these, 15 sold for over $1 million.
Over the course of the year, a total of 30 bare lots/properties changed hands for total sales of just over $ 9 million. This compares to 23 sales in 2009 for a total of $6.3 mllion (and to 44 sales in 2007 for a total of $15.4 million).
(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 personal circumstances, options, timing, and the market for your particular property.)
2010 Salt Spring real estate statistics
For the 12 months of 2010
Here are a few year-end statistics, with some comparisons to previous years:
- Total sales for 2010 were $92.4 million (161 transactions - properties with homes). (This does NOT include the sale of land, or bare lots.) This figure for 2010 compares to:
- $85.8 million in 2009 (161 transactions)
- $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)
- The median price (half sold for more, half for less) for a house sold in 2010 was $460,000; in 2009, that number 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 2010 was $557,105, compared to 2009 average of just over $515,000. The average price in 2008 was significantly higher, at $678,519. The 2007 average was closer to that of the past two years, at $570,387.
- 30 bare land properties sold in 2010 for a total of just over $9 million; that compares to 23 transactions and a total volume of just over $6.2 million in 2009.
- 15 homes sold for over $1 million in 2010, compared to 12 in 2009, 19 in 2008, and 22 in 2007.
- "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 146 days for a house to sell in 2010, compared to an almost identical 148 in 2009. (Because properties often come on and go off the market for various reasons, the "days on market", or DOM, statistics are notoriously unreliable.)
- I've estimated that on average (after tossing out obvious anomalies) homes sold for 105% of assessed value in 2010, compared to 103% in 2009. And on average, homes sold in 2010 for $305 per finished square foot vs $310/sf in 2009.
What does that mean for 2012 real estate on Salt Spring? On the upside, Canadian economic stability, low interest rates, robust real estate markets in Vancouver and interest generated by the Vancouver 2010 Olympics are having positive spill over effects on Salt Spring. We are seeing some positive impact of the booming Vancouver market, with buyers eyeing Salt Spring properties that look relatively affordable by contrast! These positive factors may be offset in 2012 by continuing global economic uncertainties particularly in the European Union. Tourists and retirees continue to watch their wallets closely ...
Anecdotal evidence suggests that visitor traffic in 2011 was about the same as in 2010, and has not recovered to 2007 and 2008 levels. The Salt Spring real estate market will always be first to be hit at times of economic downturn and the last to recover; that's the nature of our geography and our appeal.
However, good quality properties, priced appropriately, continue to sell, and in many cases, sell quickly. The higher the price, however, the more narrow the market, as fewer people can afford homes listed at $1 million and upwards.
Some things don't change:
- 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 (three counting Seattle), 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.
What sold significantly above assessment?
A review of homes that sell 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.
- Special features of the home or lot added to the value. These features include ocean views, a deep water dock and proximity to a beach and/or 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!
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.
