A little Pender Island Reality
Well, we’ve made it through Q2 of 2012 and it’s been a tough year so far. A large and ever increasing Pender Island property inventory (187 currently on the MLS at time of writing) and less buyers with the disposable income to purchase recreational property, or whose retirement income has been hit by the world financial situation, means that the Gulf Islands are still firmly entrenched in a buyer’s market.
Also, with increasing ferry fees and the challenges of running an island business, we have seen some contraction of the local economy which also puts a downward pressure on the attractiveness of our community. I have noticed some savvy local residents taking advantage of low prices to either step into the rental market by purchasing good value low-end properties, or using this opportunity to move up in size and quality of their principal residence. So, kudos to them!
So how are we doing so far this year as compared with last year? Is it getting any better?
I’m afraid the answer to that is… not yet. Consider the charts below which compare sales volumes and average prices from Jan-Aug for this year to last. The first two charts are for home sales, and the second two are for bare land.
Compared to the same time last year, our average sales volumes are down by about 30% in both residentiall and land categories. Average sales price has also taken a small hit this year (about 5% down on 2011) while the small amount of land sales showed a slight increase by a similar amount.
It’s still all about price, so I thought I would remind sellers of the 4 things that have nothing to do with current market value of a property:
1) What you paid for it. I know nobody likes losing money on real estate, but sometimes if you have to sell in a down market it’s unavoidable. Buyers are not going to overpay in a market such as we have now. So, if you have to sell, it’s much better to list it correctly than list too high and have it remain unsold.
2) What you have to realise from the sale to pay your debts or buy a similar house in a higher market. This one is kind of obvious.
3) What the dissimilar house down the road sold for. Pender Island has very few building schemes so nearly every house on Pender is unique. This is why you ask realtors to give you market value as they know how to adjust unique properties within a given market to ascertain current value.
4) What your spouse/brother/cousin/ex-REALTOR friend says it’s worth. Unless you are familiar with our Pender or Saturna Island market, anything thesesources tell you would be essentially a complete guess.
One other thing that has little to do with current market value would be your property assessment, but I have covered this topic on a couple of occasions before.
Remember that realtors are not the driving force regarding market pricing, we just react to market forces that, in many cases, are influenced by situations that neither we nor the seller have any control over. So, if we give you an evaluation that is less than expected it is not because we want to discount your home to sell it faster, it is because that it what the market is telling us about current value and what a prudent buyer would feel is a reasonable price to pay.