My Market Analysis for 2008

January 8, 2008.

Check out my market analysis for January -- I do a monthly market update
(www.liread.com/market.htm).

The uncertainties that seem to characterize the early 21st Century are still with us.
There are no roadmaps, in our backpacks, to be helpful with charting a course. A worrying
place to be, sometimes, without a clear direction.

As noted in Iowa, on the evening of Jan. 3rd, in the speeches of the "winners" of that
caucus process, the theme of "change" was ever- present. Something different is wanted, as
it's clear that the old rules no longer appear to be working.

In change lies opportunity, but it also implies a shifting away from something "known", to
something not yet evident, and this middle period can be fraught with fear and with
indecision, and therefore with inaction. It's a bit like treading water in a swimming
pool, uncertain whether to strike out for the ladder or for the shallow end.

A description of the current real estate market trend, perhaps? Inflation or deflation?
Arguments for both scenarios, from so called "experts".

Some things to note: the U.S. subprime issues/resulting credit crunch, in 2007, with
spin-off throughout financial institutions, throughout the world, has created a housing
slump in many key U.S. venues. Oddly, other areas remain buoyant. Real estate has always
carried a regional component with it, underlying the overall "large trend".

The U.K. is also finding a housing "plateau", if not slight depression -- again, some
areas are afflicted more than others.

At the same time, there is a growing concern that currencies are not reliable. Which
currency? How much is being printed? What's backing it? What about inflation?

The listing inventory on the Coast, including on Salt Spring Island and the Southern Gulf
Islands, remains very "thin". Most owners still prefer not to be sellers, unless they
"have to" (death, divorce, and moving to assisted living remain the key reasons for a
sale). Holding that hard asset may be the strongest sign of continuing interest in overall
"hard asset" investment.

Good real estate holdings, gold, antiques, art, etc., are considered prime venues for
preservation of capital, and this may be the underlying theme, as we continue to move
through these uncertain times. The stock market is seen as too volatile, with the capacity
to lose principal assets.

Although real estate values may move downwards, when compared to the markets of four,
three, and even two years ago, they do not usually return to the price points in place
before the rise in valuations. And, like all cyclical options, real estate will rise, once
again.

The important thing is to buy what one likes and what one can afford, and to be able to
hold it, during the downward pressure times.

A hard asset means exactly that -- it remains in place, a valid commodity, regardless of
price swings, unlike shares in the stock market which can simply disappear.

Preservation of capital might be a good, though conservative, goal for 2008.

It might explain why buyers are around right now, too, not wanting to keep cash in the
bank, but looking for good investment in protected real estate venues.

There's that Islands Trust! Back in 1974, the Provincial Government set in place the
Islands Trust, and decided, then, the growth/development potential for each Island. When
one looks at Salt Spring & the Southern Gulf Islands, today, they are very close to what I
term the "wall of no more".

Growth is strictly controlled by severe zoning/density restrictions, and the Islands are
pretty well developed, as much as they will be. This kind of protected environment is very
appealing to that global buyer.

The Internet made geography and time irrelevant. "Local" really means "global", today,
just as Marshall McLuhan forecast (he called it "the global village"). It may take time
for the buyer to discover Salt Spring & the Southern Gulf Islands, but, once found, these
treasures have enormous appeal.

Close to major centres (Vancouver, Victoria and Seattle), and with a park-like environment
that is carefully protected, by the Provincial Government, these beautiful areas also
answer the search for a protected real estate investment (no industry, ecologically
protected area, with all amenities, and a cap on growth) -- this kind of "cap" on
development, in a pristine and accessible area, usually equals price increases of a
substantial nature, over time.

Carmel of the North, perhaps? Muskoka of the West? Whistler by the Sea? The Hawaii of
Canada? Maybe all of these?

More details? "See Li for Successful Solutions!"

Contact Li Read at Re/Max Salt Spring:
1-800-731-7131
Phone/Fax: 250-537-4287
email: islands@liread.com

Ask for Li!