January 2025 – Market Analysis – Salt Spring Island

Here we are, at the very beginning of a New Year. Past and future mingle.

Named for the Roman god Janus, a deity with two faces, one looking behind and the other gazing forward, January offers us both the immediate past and hopes for the future.

2024 closed with extraordinary and continuing low real estate inventory. Serious interest rate cuts did help to create renewed sales action in October, November, December. Prices stabilized. Projections for real estate were all suggesting that price escalation would occur in 2025 and inventory would continue to remain low.

It takes until March Break to see the tone of a new year, in our secondary home/recreational marketplace. What we do know: the low inventory means lack of choice for buyers. It encourages action when a buyer sees a possibility and it may mean having to offer close to list price or “over ask”. It may also encourage the reverse, inducing a wait and see pause, similar to the outcomes in 2022, 2023, and early 2024. Stable pricing and lack of product do not necessarily create strong sales. Buyers can also tread water.

So many global events and changes make it difficult to call projections. A low Canadian dollar against the U.S. currency may bring strong tourism from the U.S. The federal ban on foreign ownership (currently until January, 2027) makes it difficult for U.S. buyers to invest (once a strong buyer profile in all the Gulf Islands). There are many exceptions to this ban on foreign purchases…important to check into these.

Wars and rumours of wars persist. Diminished purchasing power of the Canadian currency is worrisome. The true effect of Artificial Intelligence has not been fully understood. A new president takes office in the U.S., and Canadian outcomes are often framed by decisions taken with its biggest trading partner. Pressure to call a federal election is gathering interest from the other parties. The provincial government has put off a legislative sitting until February, and requires an arrangement with the two elected Greens to offer governance.

Change, change…everywhere a change….yes, we can all hum away to this 1960s tune. January opens with significant shifts. Time to attend seminars and webinars on financial projections…time to listen a lot…time to value again the hard asset protections, the preservation of capital, offered by good real estate holdings.

If an owner, is it a time to sit tight? Unless one knows next steps, one might sell and then not find a replacement…becoming houseless is a real issue. If a buyer, is it time to buy what may need work, but will escalate in value over time? Younger buyers might be wise to consider “sweat equity” concepts. Or think about creative co-ownership opportunities. Thinking in-depth is a good way to navigate the first six weeks of a New Year.

So, it’s January…mid-winter in our coastal area. Every day is a few seconds longer and the slow march to Spring is underway. Tiny shoots of green are visible in protected corners of gardens and fields. It may look severe above ground, but at that root level it is busy getting ready for Spring’s eruption. A good reminder that we have the opportunity to consider planning for changes, too.

It’s January…time to segue into new things…at this truly New Year. And your plan is? Share.