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A Snapshot of our Pender Island Market heading into Spring/Summer 2012

By Howard Sanders • April 11th, 2012
Pender Island, BC

Boats moored at Medicine Beach, Pender Island

The winter from last November to Jan was very quiet with practically no buyers and few calls, but now that the sun has decided to stick around for a few days at a time we are starting to finally get busier in the Pender Island real estate market.

So far, since Jan 1 to April 10 2012, there have been 13 sales on Pender Island – 12 residential and 1 for bare land, which set me thinking as to how this stacks up to previous Q1 sales since 2010. How is our market doing compared to previous years? Has it improved, got worse, or remained the same?

Like most things it seems to be a mixture of good and bad news for sellers. Breaking the stats down we come to the following:

2010 – Q1 sales between Jan 1 – April 10 were 13 in total, with 7 residential and 6 bare land. Those 13 sales are broken down into the following averages;
Average sales were within 94% of list price.
The average list price was 102% of the assessed value
Average sales were 95% of assessed value.
Total sales volume for Q1 was $4,584,200

2011 – Q1 sales between Jan 1 – April 10 were 12 in total, with 8 residential and 4 bare land. Those 12 sales are broken down into the following averages;
Average sales were within 93% of list price.
The average list price was 103% of the assessed value
Average sales were 95% of assessed value.
Total sales volume for Q1 was $3,907,000

2012 – Q1 sales between Jan 1 – April 10 were 13 in total, with 10 residential, I fractional quarter at Currents and 2 bare land. Those 13 sales are broken down into the following averages;
Average sales were within 91% of list price.
The average list price was 96% of the assessed value
Average sales were 88% of assessed value.
Total sales volume for Q1 was $6,577,501

So what does this mean? For starters it tells us that our sales numbers are flat, but consistent over the last three years. This is good, considering the downward pressure on all real estate markets. It tells us that we are not losing buyers, but not gaining any either. Our market is essentially holding steady.

However, bare land sales are decreasing year to year, from 8 in 2010, to 6 in 2011 and 2 this year so far. It also shows our sales volumes in terms of dollar amount are up considerably from the last two years, particularly from last year where it has increased by almost 60%. This tells me two things:

1) That buyers may be waiting for the repeal of the HST (payable on certain subdivided land and on construction materials)before land sales pick up, and
2) That buyers this year are looking at higher priced properties that require less work and are priced well in the market. This is reflected in the averages above where sale price to list price has declined year to year, showing that buyers are wanting to pay less and confirming that our list prices are still too high and need to come down further to stimulate our market.

Conclusion
Our market is holding steady year to year in terms of number of sales and is responding to the correction in the general real estate market, but still not fast enough. If we had responded appropriately we would find an increase of sales year to year and so far this hasn’t happened. The drop in bare land volume is not good news but, as I said earlier, I think this may pick up with the HST repeal in March next year. The increase in the dollar volume of sales I think reflects a slight change in buyer behaviour. Since February there have been 5 sales of properties over $400,000 which is a definite improvement, showing that if a property is priced well and maintained correctly with the appropriate permits buyers are now willing to explore beyond island cabins and cottages that can be potential rentals. Condition seems to be key, with buyers unwilling to look at higher priced homes that need work or have deferred maintenance. Buyers who are in the $400,000 plus range don’t seem to want to have to put money into renovations looking instead at well priced homes in good condition with little or no work required.
This goes to the heart of real estate. Well maintained homes with good kerb appeal and a price reflecting our current market appear to be selling. Overpriced homes with work to be done, or those outside the current market value, are not. It’s as simple as that.

 

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