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SALT SPRING ISLAND REAL ESTATE IN 2011 & BEYOND...
The 2011 Real Estate year on Salt Spring Island still ended on a slower and lower note, with total of 168 properties changing hands (down from 195 in 2010), the lowest volume in more than 10 years. The average sale price for a non-waterfront residential property slipped by almost 10% from 2010 and the median price by about 5%. Oceanfront properties did the reverse, shaved off about 5% of the average sale price and 10% of the median.
Of the total, 22 oceanfront properties were sold (18 in 2010), 5 building lots under 2 acres (7 in 2010) and 100 residential non-waterfront detached homes (123 in 2010). The lowest sale price in 2011 for a detached home was $170,000 (for a tiny single person home on 1/4 acre) and the most expensive non-waterfront home (new) sold for $1,180,000 on 5 acres (the only non-waterfront property sale over $1 mil). The most expensive oceanfront home sold for $2.5 mil, the least expensive oceanfront home sold for $450,000 (a fixer upper in the heart of Fulford village). 13 non-waterfront town homes (almost twice as many as in 2010) sold ranging in sale price from $290,000 to $489,000. Brinkworthy Place recorded 9 sales.
What is in the crystal ball?
The big bank analysts seem to continue to think doom and gloom with the media happily reporting the same. Now this is good in one way for us the mortgage holders, since it keeps the Bank of Canada overnight rate down (steady at 1% since September 2010). But it does nothing to improve consumer confidence, one of the fundamentals of economic recovery. The doom and gloom school of thought could be missing the first real, even if perhaps still flickering, rays of dawn; the dawn of recovery. There is now better news emerging from south of the border. For instance, much higher number of new jobs than anticipated in December (200,000 as opposed to the expected 150,000) with the unemployment rate the lowest in 3 years at 8.5% (7.5% nationally in Canada, 7% in BC). The Canadian economy is not faring badly either, even if its performance may be below our expectations. Small steps perhaps, but steps in the right direction.
Across the Atlantic, while the media including the BBC relentlessly beat the economic crisis in Eurozone to death, Germany showed a stable employment rate since the global financial crisis in 2008/2009 with the current unemployment rate at 5.7% with a historic record number of 41million men and women employed in 2010 and with the annual economic growth of over 3% in the last 2 years. Similar statistics emerge from the central member countries (of course not from Greece, Italy or Spain whose internal financial shambles should not indeed be underestimated). The Czech Republic has been waiting now for several years for the gloom and doom to cross its borders as forecasted by economists and the media. So far it has never arrived. Instead, many sectors of its economy reported record levels of production and sales led by the automobile industry with sales up 20% for Skoda and Hyundai in 2011. This speaks volumes about consumer confidence (at least in these countries and in countries where the products are exported to) in spite of the contrary numbers and associated graphs reported by many economic agencies.
Taking all things into consideration, it is my opinion that in real estate generally and on the island in particular, we will likely see more of the same in the terms of the pace of the market in the next year or two but slight to modest rise in sale prices and volume. I believe that we will look back at the years of 2011/2012 as the “bottom of the market” albeit the bottom of this economic valley being wide and the journey long.
We must not forget that, some areas of Vancouver excepted, the peak of the Real Estate prices was around 2008 – almost 4 years ago. Indications are, and I believe that a change, slow but positive, is on the way. So the next time we eat in a (local) restaurant or buy a car or a house, let us have a good feeling that we are contributing to the much anticipated economic turnaround. And for those who are still thinking about buying a property, do not stay on the sidelines too long, the tide of good buys seems to be about to change!
Reprinted from the Drifwood newspaper January 11, 2012
Courtesy of Tom Navratil, Pemberton Holmes Realtor