Housing Market in 2018 Performed as Expected NANAIMO, BC – Sales of single-family homes in December dropped by 48 per cent from one year ago and were 44 per cent lower than in November.

Last month, 170 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 304 in November and 328 one year ago. Apartment sales in December were 65 per cent lower than in December 2017, while the number of townhouses sold in December dropped by two per cent from one year ago. Annual sales of single-family homes in 2018 totalled 4,543, a 19 per cent drop from 2017. However, this reduction reflects the market returning to more normal levels after the robust housing markets witnessed in 2016 and 2017.

Inventory of single-family homes last month rose by 23 per cent from one year ago (941 to 761) but dipped by 12 per cent from November 2018. Active listings of apartments rose by 20 per cent (225 to 270) year over year and townhouses by 59 per cent (93 to 148).

The 2018 housing market behaved as expected, moderating after the record-setting pace set in 2016 and 2017. Government policy-side measures introduced to cool the market, such as the mortgage stress test (Guideline B-20), eroded the purchasing power of some prospective home buyers by as much as 20 per cent. Despite lower demand, however, year-over-year benchmark prices of single-family homes continue to rise board-wide, up 10 per cent from December 2017.

Price increases in individual markets ranged from seven per cent in Nanaimo to 20 per cent in Port Alberni. Small month-over-month price reductions from November to December were posted in Duncan, Nanaimo, and Port Alberni. The year-over-year benchmark prices of apartments and townhouses board-wide increased by 12 and 13 per cent, respectively. Decreased demand and additional inventory are helping VIREB’s long-running sellers’ market transition to one that is balanced or near-balanced. However, “micro markets” are omnipresent in many communities, favouring sellers for moderately priced properties and benefitting buyers for higher-end homes.

Overall, however, REALTORS® are reporting that they are negotiating fewer multiple offers, with many buyers taking more of a wait-and-see approach. “Realistically pricing your home is important in any market, but when fewer buyers are competing for a property, sellers need to be far more strategic,” says Don McClintock, 2018 VIREB President. McClintock also notes that property assessments, which were recently issued, complicate the pricing process for sellers who may not realize that the assessed figure is based on the previous year and does not reflect a home’s current value.

The expertise of a REALTOR®, who will conduct a comparative market analysis using recent sales data, is hugely beneficial when determining an optimal sales price. The benchmark price of a single-family home board-wide was $506,300 in December, a 10 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 $319,000, up 13 per cent from last year. The benchmark price of a townhouse hit $411,500 last month, up 12 per cent over December 2017 but down slightly from November.

Last month, the benchmark price of a single-family home in the Campbell River area hit $414,600, an increase of 13 per cent over December 2017. In the Comox Valley, the benchmark price reached $508,100, up 10 per cent from last December. Duncan reported a benchmark price of $466,600, up 10 per cent from December 2017 but down two per cent month over month. Nanaimo’s benchmark price rose seven per cent to $538,300 but dropped by two per cent from November.

The Parksville-Qualicum area saw its benchmark price increase by 11 per cent to $580,500 while the cost of a benchmark single-family home in Port Alberni reached $299,000 in December, up 20 per cent from one year ago but down four per cent from November. 

ABOUT VIREB VIREB represents over 1,000 REALTOR® members in nearly 90 member offices on Vancouver Island (north of Victoria). 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 neighbourhoods or account for price differential between geographic areas. Trademarks are owned or controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA (REALTOR®) and/or the quality of services they provide (MLS®).

FOR IMMEDIATE RELEASE October 1, 2018

Long-Running Sellers’ Market Moving Towards Balanced Conditions NANAIMO, BC –

Sales of single-family homes in September dropped by 32 per cent from one year ago and 25 per cent from August 2018. Last month, 348 single-family homes sold on the Multiple Listing Service® (MLS®) System compared to 467 in August and 511 one year ago. The number of apartments and townhouses changing hands last month dropped by 26 per cent and 41 per cent year over year, respectively. Inventory of single-family homes in September rose slightly, up four per cent from last year.

Active listings of apartments dipped by six per cent year over year while townhouse inventory posted a modest increase, up by three per cent over September 2017. “We attribute the weaker sales throughout British Columbia to a decrease in demand rather than oversupply,” says Cameron Muir, Chief Economist, British Columbia Real Estate Association (BCREA). “The mortgage stress test and higher interest rates are taking their toll on housing sales throughout the country.” On the positive side, the provincial economy is still doing well, and BCREA anticipates that housing sales will make a modest recovery during the next couple of quarters, albeit not to the levels seen in 2016 and 2017.

Further, Vancouver Island is somewhat immune to the effects of Guideline B-20 because the broad demographic trend continues to include baby boomers and retirees who typically do not need mortgages. That said, VIREB’s long-term sellers’ market appears to be moving towards more balanced conditions, says Don McClintock, 2018 VIREB President. “Multiple offers have certainly slowed, and buyers are taking more of a wait-and-see approach, which is a good thing,” says McClintock. “Sellers need to be realistic when listing their home, which is why it’s important to consult with a local REALTOR® who can help determine the optimal price for your property.”

Regarding prices, the Home Price Index (HPI) recorded modest price reductions month over month for single-family homes in Campbell River and the Comox Valley, but year over year, prices continue to rise board-wide. The benchmark price of a single-family home for the overall board area hit $508,800 in September, a 12 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 $319,600, up 18 per cent from September 2017. The benchmark price of a townhouse hit $414,300 last month, up 14 per cent over last year.

Last month, the benchmark price of a single-family home in the Campbell River area rose to $402,700, an increase of 12 per cent over September 2017. In the Comox Valley, the benchmark price reached $495,700, up nine per cent from last year. Duncan reported a benchmark price of $470,400, up 11 per cent from September 2017. Nanaimo’s benchmark price rose 10 per cent to $554,000 while the Parksville-Qualicum area saw its benchmark price increase by 11 per cent to $575,100. The cost of a benchmark home in Port Alberni reached $303,900, up 19 per cent from one year ago.

   After over twelve years of selling real estate in Nanaimo I can only call it one word in this market: MAYHEM! It's easy to get carried away by the hype when a market is as hot as the one we have witnessed in Nanaimo in 2016.

   Market values over a 12 month period from September 2015 are up 17.31% on single family homes in Nanaimo! The inventory shortage (see my last post) has resulted in multiple offers and bidding war scenarios being seen in unprecedented levels in Nanaimo. The frenzy has spread to condos which have been relatively flat in terms of growth for several years but have now seen an overall growth by 13.16% over 12 months. See VIREB's up to date September stats here

   Town homes and condo units sold has drastically increased over last year as a direct result of this single family mayhem! Isolated pockets of the city are seeing 20 and even 30% growth in overall market values in a period of 12 months!

   It's easy to see why many sellers are catching the fever, especially with many stories of wild over list price sale results circulating amongst homeowners. It is of paramount importance to remain objective and rational when pricing your home. To do this one must put themselves in the mind of the average buyer, and look to the facts in a recent market sampling. We are often very subjective or emotional when it comes to our dwellings. This will not help us decipher the true market value of our home.

• What will the average person think my home is worth?
• What other listings will I be competing with?
• What homes similar to mine have sold nearby recently?
• What economic or legislative factors are on the immediate horizon? (Think 15% foreign buyer tax in Vancouver)

The running theme for 2016 in the Nanaimo real estate market has been low inventory, which reached a critical, record setting low point in August, as extreme demand has placed continual pressure on the local real estate market supply. Sales activity in Single Family Homes and Condos were up a whopping 42 and 87 percent respectively while townhomes saw solid sales growth of 17% compared with August 2015 In fact due to this continual strong summer market, inventory reached a full 38% lower then the low in July of 2015!

Nanaimo region is seeing a perfect storm due to the expensive Vancouver and Victoria markets triggering people to look elsewhere, low interest rates, retiring baby boomers coming to the island from all over Canada, and probably the best climate and scenery mix when considering any other location in the country. Continued record tourism seasons, and social media word of mouth have only put further focus onto the Nanaimo region which is still a relative discount compared to other local housing options.

August is usually a month where real estate sales tend to slowdown, but as inventory and demand have been so extremely polarizing, a very fast paced and active August was the result. See the full VIREB report for August HERE .

Buyers are effectively getting outbid, or outpaced in the competitive hunt for their ideal home. Sellers have a real opportunity to attract top dollars with the right property but also need very clear perspective and expectations regardless of the market pace. If you price too high, you will waste your time and potentially your opportunity to capitalize. You need a local expert in your corner with a proven track history of meeting and exceeding their clients' goals in a buying atmosphere that we are probably going to see extend into 2017. I look to continue to provide my expertise and determination for buyers and sellers in this extremely fast paced market. Let me be the difference in your corner! Contact me anytime, and we can get to work in your quest to buy or sell.

All My Best,

Rick Horsland