Real estate on Salt Spring in 2016 was hot, breaking records in most categories, with average prices rising close to or a little over the peak levels of 10 years ago.
I called 2015 a “very good year.” 2016 was exceptional.
The hot 2016 market reflected the combination of low supply and strong demand, with motivated buyers coming from Vancouver (as usual, the largest group of buyers here, other than Salt Springers themselves). Good properties, appropriately priced, sold much more quickly in 2016 than in previous years, also helping to keep the supply low throughout the year. The immutable law of supply and demand pushed prices significantly upward.
In 2016, a total of 360 properties sold for a total value of $203 million. In terms of number of sales, this represents a 32 per cent increase year over year, while the total dollar value was up 42 per cent over 2015. The 2016 market also surpassed the very active 2007 period in most categories.
Included in the 360 properties that changed hands in 2016, we sold a remarkable 86 “bare land” properties for a total value of $30.2 million. Included in the bare land statistics for 2016 was the sale of the 850-acre Channel Ridge property, selling for $5.3 million. Even stripping that figure out of 2016 stats, sales of bare land last year outpaced all previous years. Island building contractors are busy!
For a perspective on how high that volume was: In boom year 2002, 68 bare land properties were sold for a total of $14 million; in 2007, 44 for a total of $15 million. In 2015, we sold 32 properties for a total of $8.7 million.
In the 360 properties that sold were 229 single-family dwellings (SFDs). Of the 229, 198 were non-waterfront. The average of the non-waterfront SFDs was approximately $600,000, skewed somewhat by a $3-million non-waterfront sale on Southey Point and the $2.4-million sale of a vineyard property. The median price for non-waterfront single-family dwellings (with half above and half below this price) was approximately $525,000.
Of the 229 SFDs sold in 2016, 31 were waterfront (WF), with a nine-acre waterfront property on Southey Point selling for $4.0 million and a large property in the south end on Bridgman selling for $3.5 million. Scott Point saw a waterfront sale at $2.8 million. Overall, the average WF property was $1.25 million; the median value was just under $1 million.
In townhouses, 2016 was a good year for sales, with 23 sales totalling $9.7 million, at an average price of $421,000. This was somewhat lower than the average price for 2015, which was, however, skewed by a couple of million-dollar sales in Grace Point in 2015.
At Brinkworthy, prices rebounded strongly in 2016 with 13 sales for a total of $1.97 million, averaging a little over $150,000 (versus the 2015 average of $114,000). This 55+ community remains a very viable and attractive option for people downsizing on the island.
Compare to 2015 and earlier
In 2015, 272 properties in all categories sold for a total value of $143 million. Of these, 161 were non-waterfront averaging $527,000; 35 were waterfront, averaging a little over $1 million.
The year 2007 was one of our busiest years on record, when a total of 283 properties sold for total volume of $151 million. Non-waterfront SFDs in that year averaged in the mid $500,000s, while waterfront homes averaged $1.4 million.
Going back to 2002, also considered a busy year, 211 properties sold for a total of $62.7 million. Of these, 22 were waterfront and averaged a little over $600,000.
Who are the buyers?
The number of Salt Spring and Vancouver buyers was almost equal in 2016, with 111 properties listing a Vancouver resident as buyer, vs. 117 properties listing Salt Spring as the buyer’s home. Vancouver residents account for a higher percentage than locals of properties selling for over $500,000.
A total of 14 properties sold to U.S. residents in 2016, more than in the past several years. Victoria and Vancouver Island accounted for 30 sales, with buyers also coming from the B.C. Interior and Alberta, and a smattering from other Gulf Islands and Bowen Island, Ontario and other provinces. European buyers accounted for two sales in 2016.
A word about headlines
A client recently told me he’d read a headline saying that prices were down 30 per cent. But when I asked for more information, he wasn’t sure if it was referring to Canada, prices, or sales, or what period they were comparing.
On the same page in the Globe and Mail in the first week of January were these two headlines: “Vancouver housing market extends slump” and “Home values skyrocket in Vancouver area.” How can that be? You really have to delve into the copy to understand what’s really going on — and look at the periods being compared, the geography examined and the nature of the statistics themselves.
Although affected by national and international economic factors, Salt Spring real estate is a world unto its own. While yes, we are affected by prices in Vancouver — in that sellers there are able to buy a lot of house here for much less money, our trends do not track Vancouver prices or sales. Don’t extrapolate statistics from Vancouver, B.C. or Canada, for that matter, to what’s happening here.
Although it’s too soon to give a definitive forecast, 2017 is shaping up to reflect similar conditions as 2016, although we appear to have even more limited inventory than last year. With even fewer property listings to sell, prices would definitely continue the upward trend. Indeed, there is serious interest and lots of buyers around, waiting for new listings. It looks to be a good time to be a seller on Salt Spring.
The writer is a realtor with Pemberton Holmes on Salt Spring Island.