We are now through the first quarter of 2019 in the Nanaimo real estate market, and if I had to pick one word to describe it, it would be “steady”. The number of homes sold has dropped fairly substantially while prices have largely held there own, rising modestly by about 5% over the 12 months.
The market is not “crazy,” as it has been in years’ past. It’s not “hot,” as we have grown accustomed to. The market is basically steady, however hot, warm, mild, and even cold pockets exist depending on location, price point, and housing style.
The market is very steady right now, but also very spotty. No longer can listing agents simply allow the market to do the work for them. Picking a strategy, and pricing appropriately, can make all the difference in this market, which is why you see oh-so-many properties being listed, then re-listed, all at different prices.
As I write this, I have a listing on Howard Avenue priced at $650K that got it’s first offer in a week — and now has an accepted offer — all in less than a month. That’s decent in any market, and not uncommon when homes are priced well.
Indeed we’re still seeing “multiple offers” on particularly on sharply priced properties, especially when priced below $500K, but however, we’re also seeing buyers turn up their noses at the prospect of lining up to “bid” in some market segments.
I do expect things to heat up a little as we move into the busiest part of the real estate calendar,but however, buyers and sellers alike have to keep a sharp eye on the market in order to avoid being caught off guard.
Market Stats for April 2019 – Nanaimo & Parksville/Qualicum
Demand continued to slide in April across the VIREB region (all of Van Isle minus the Victoria Region). Sales of single-family homes in April board-wide dipped by 13 per cent percent year over year but rose by 33 per cent percent March. Last month, 412 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 475 in April 2018 and 308 the previous month. In the apartment and townhouse categories, sales dropped by three per cent and 24 per cent, respectively.
The mortgage stress test (Guideline B-20) continues to wreak havoc in the market, while the B.C. economy continues to be highly supportive of housing demand, the negative shock to affordability and purchasing power created by the stress test is making it extremely difficult for some buyers, particularly millennials, to enter the housing market.
Prospective buyers who can afford monthly mortgage payments are unable to qualify because Guideline B-20 erodes their purchasing power by as much as 20 per cent. percent. Weak housing demand has contributed to an increase in total active residential listings across the VIREB area, inventory of single-family homes in April rose by 22 per cent percent from one year ago (1,056 to 1,289), the highest it’s been since August 2018. Active listings of apartments climbed by 16 per cent (260 to 301) year over year and townhouses by 23 per cent (162 to 199).
Whether rising inventory levels will be enough to lower prices and make housing more affordable remains to be seen. However, despite decreased demand, prices in the VIREB area are still rising, although those increases are softening.
VIREB REALTORS® are seeing price reductions on higher-priced homes while demand is still relatively strong for houses in the $400,000 to $550,000 range. The benchmark price of a single-family home board-wide was $517,800 in April, a five per cent increase from one year ago. (Benchmark pricing tracks the value of a typical home in the reported area.) In the apartment category, the benchmark price climbed to $325,900 from one year ago, an eight per cent percent increase. The benchmark price of a townhouse hit $429,700 last month, up 10 per cent percent over April 2018.
Nanaimo and Parksville/Qualicum Market Stats:
Nanaimo: Nanaimo’s benchmark price rose by three per cent in the last 12 months to $560,800.
Nanaimo: The Parksville-Qualicum area saw its benchmark price increase by four percent in the last 12 months to $582,500.
Average – Single Family and Condos:
Nanaimo: The 12 month moving average in April for a detached home in Nanaimo was $561,435, up 6% in 12 months, and for condos, $306,690, up 8% in the last 12 months. The average for the month of April was $586,595 and $296,093 respectively.
Parksville/Qualicum: The 12 month moving average in April for a detached home in Parksville/Qualicum was $617,866, up 6% in 12 months, and for condos, $295,450, up 11% in the last 12 months. The average for the month of April was $662,136 and $270,155 respectively.
A note about Averages: VIREB cautions that average price information can be useful in establishing trends over time, but does not indicate the actual prices in centres comprised of widely divergent neighborhoods or account for price differential between geographic areas. For that reason I only use the 12 month moving average vs the monthly average which is far more volatile and thus less reflective of the market over time. The Benchmark price is, however, a better indicator of value.
Active Listings, Single Family Detached:
Nanaimo: There were 335 active single family listings in Nanaimo in October vs. 301 a year ago.
Parksville/Qualicum: There were 181 active single family listings in Parksville/Qualicum in October vs. 30 a year ago.
Units Sold, Single Family Detached:
Nanaimo: There were 343 active listings in total with 184 listed in April vs 104 sold with a Sell List Ratio of 57%. A year ago there were 317 active listings with 122 sold in April 2018 with a Sell List Ratio of 54%. On average it took 29 days to sell a house and on average sellers got 98% of the list price.
Parksville/Qualicum: There were 195 active listings in total with 101 listed in April vs 71 sold with a Sell List Ratio of 70%. A year ago there were 134 active listings with 75 sold in April 2018 with a Sell List Ratio of 68%. On average it took 28 days to sell a house and on average sellers got enjoyed 97% of the list price.
Nanaimo: The cost of vacant land in Nanaimo has risen 20% in the last 12 months.There were 122 active listings in total with 29 listed in April vs 6 sold. On average (over 12 months) it took 105 days to sell a lot and on average sellers got received 94% of the list price.
Parksville/Qualicum: The cost of vacant land in Parksville/Qualicum has barely risen 1% in the last 12 months.There were 37 active listings in total with 9 listed in April vs 1 sold. On average (over 12 months) it took 46 days to sell a lot and on average sellers got 96% of the list price.
What It All Means
I think the market will continue to be balanced between buyers and sellers with homes priced above $700K favoring buyers, while under $500K the market tends towards favoring sellers. In between, it depends on location and price.
Looking forward I am confident that the Nanaimo area market will hold it’s own due to its relatively inexpensive land costs combined with the proximity to the Lower Mainland and the fact that this area is arguably one of the best and most popular retirement targets countrywide, with over 50% of buyers come from off-island.
Land here is still very reasonable in relative terms, and Boomers from major Canadian markets can still realize their dream home for way less than what they can sell their current home for in say Toronto or Vancouver. Baby Boomers will continue to want to move here, even if they are not getting quite the lofty proceeds on their big city homes that they anticipated.
Prices in the higher ranges will continue to soften creating some great opportunities for buyers flush with cash, or credit.
The other looming factor which could have a big impact on our local market is the possibility of a fast commuter ferry starting service between Nanaimo and Vancouver as early as this summer. If it starts and is reliable I think it could help push up real estate prices across Nanaimo.
If you’re shopping above $700K, make slightly more aggressive offers. Between $500-$700K, location and price are key, under $500K it’s tougher as you may have to compete with others to get the property. It is strategically important for all buyers to be solidly pre-approved. This allows you to lock in your interest rate. Don’t try to time the market. The market may go up, or down in the short run. Buy what you like and can afford, now. You’ll make money, in the long run, no matter what happens in the short run. And be wary of staging – because it works.
Don’t be greedy and be patient. Stay ahead of the market or you could land up selling for less in the long run than if you price sharply now. Again, don’t try to time the market. If you actually want to sell now, price it to sell now. “Make Your Home a Cream Puff” – aka a well-priced, clean, spiffy, beautifully maintained house in a fine area. Every buyer`s dream house is a creampuff. And so is every agent`s dream house-because creampuffs sell fast.