Nanaimo Real Estate Market Report for March 2020
What a difference a month makes.
In my last newsletter I was predicting a very hot spring market here in Nanaimo. Ever the skeptic I ended that newsletter with a list of potential headwinds that I foresaw may slow down the market including: “COVID-19. This is the big wild card. No one knows what if any effect it may have on the economy and/or the market.”
Well now we know, that headwind has become a hurricane.
Some agents out there are acting as if it were “business as usual”. I want to ensure the people that place their trust in me that I will not sugar coat it. I will always tell you like it is. I want you to be fully informed, to see, understand, and accept reality, and to base your decisions on factual information. Even if it’s scary.
With every passing day, we learn more and more about COVID-19 and how it’s going to impact all our lives. Many people are already overwhelmed with the news and perhaps don’t want to read any more about it. If you’re one of those people, then just move on from this email, and I’ll apologize in advance for adding to your stress level.
For those of you who want to know how COVID-19 is affecting the real estate market, this newsletter is for you.
March should have been a huge month for the market here in Nanaimo.
The upward trend line was clear as day. After two years of relatively flat numbers the housing market was finally on a solid rebound. We were all set for a red hot spring market complete with rising prices, multiple offers, and lots of sales. Myself and many other agents were busy and getting busier by the day. And then it happened, an inflection point somewhere in mid March where the new reality set in and activity started to dramatically drop off.
March market data for Nanaimo looks deceptively normal. Actually quite similar to March 2019 numbers. But that cannot be as we know how busy things were earlier in the month and that Vancouver and Victoria had been on an upswing for some time. In fact the market was on a tear right up until mid March, and then it woke up to reality.
Over the latter half of the month people starting feeling weirder and weirder going into houses, or listing them and having others enter their home.
The data from the super busy two week pre-stay-at-homeperiod in the first half of March has combined with the 2 week post-stay-at-home-period, leaving us with numbers that resemble a pretty average month instead of the huge month that the trendline was suggesting before we began isolating.
Now there are fewer and fewer new listings everyday, and more and more price drops, and cancellations. There were about 60 new listings in Nanaimo in the last 7 days of March and just under 30 sales over the same period. There were also 23 price drops and there were 20 canceled listings.
Looking forward I would anticipate more and more price drops as Sellers who need to sell now drop their price to help get it sold sooner than later, especially with far fewer Buyers afoot. Still more Sellers will just cancel their listing all together and wait it out as they see a dramatic fall off in showings, and become more and more concerned about strangers entering their home.
When April data finally comes out in early May, I think the drop in activity will be abundantly clear as we will finally see what a full month of Coronovirus looks like in real estate. That said look for a jump in canceled listings in April.
To the extent the market is just “pausing”, as some have suggested, I think the drop in the number of properties sold in April is going to be ugly if not historically unprecedented. And because it is unprecedented we just don’t know how the market is going to perform when things start to get back to normal. Whether it will be a “pause”, or something more profound.
Historically down markets suffer from a lack of demand and see large numbers of listings. In other words a Buyer’s market. We saw that from 2008 until 2012 when trying to sell a house in Nanaimo was an exercise in persistence and patience. This time both demand and supply have dramatically fallen all at once, and all of a sudden. That is a first.
Don’t get me wrong. There will still be people listing their homes for sale and there will still be Buyers looking for their next home. Just far fewer of both. Buyers who need to buy now will and some will try to find deals, and there may be some. While most will simply put their home buying plans on hold and wait it out.
I still think our highly anticipated spring market will come, albeit somewhat subdued, in early summer instead of, well, spring. Hopefully as early as June. But that prediciton is definately subject to change.
Going Virtual – Where there’s a will there’s a way.
Realtor’s have been issued detailed showing guidelines and information to help make the process safer for all and most are following them.
Along with their Sellers, listing agents are trying different ways to satisfy a Buyer’s need to view the home, while minimizing risk to the occupants, and that of course includes tenants. Vacant properties are far easier to manage.
The quality of 3D Virtual Tour technology is better than ever. It’s almost like actually walking through a house, except you’re not. Buyers are able to “walk” the interior of the home without entering it. A distinct advantage these days. Realtors are very optimistic that this will keep the transaction train moving. In the end however home buying is a visceral experience.
People want to see if a home, well, feels like home.
One solution may be to only allow an on site visit after an accepted offer is in place, likely made subject to viewing. From a legal perspective, transactions where the Buyer never physically views the property can potentially be problematic. Indeed all parties involved in these circumstances should seek legal advice. As for the paperwork, it can all be done remotely.
We stand (at home) on guard for thee.
We as Canadians and British Colombians should feel especially proud right now. As a country, society and community we have out performed almost every other industrialized nation when it comes to “flattening the curve”.
As a people we are putting each other before politics and money, and sometimes before ourselves as with front line health care workers. (Thank you!)
Strong and the brave, we are also incredibly giving and generous, thoughtful and caring and indeed selfless. This is true no more so than here in BC. Led by the soft spoken and unassuming BC Provincial Health Officer Dr. Bonnie Henry, (I call her the velvet hammer), we have rallied like never before, and we are winning here in BC and on the island.
By staying home we are doing what we can to help our community while lowering the risk to those around us that may be at a higher risk. And we are staying home enmasse. We are being the Canadians we have always strived to be, and then some.
Years from now, well after a vaccine is found and times are normal again, we will look back at these heady days and recall those immortal words of Winston Churchill; “this was their finest hour”.
In the meantime, stay safe, stay home, and be well.
Here’s to better days ahead!
Questions? I’d love to hear from you!
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PS No one has a crystal ball.This monthly newsletter is my effort to take today’s data and then try to look ahead 2-3 months, beyond that things become far less predictable. It is also based on all things remaining pretty much as they are today. Readers should do their own research if important.