How’s the Nanaimo Real Estate Market as of January 2015?
Most people have heard the terms “buyer’s market” and “seller’s market”, but do you know what they really mean and how they are determined?
The Nanaimo real estate market is cyclical – which is why you may have heard the term, “real estate cycle.” Several key factors influence this cycle, including interest rates, employment growth, investment growth, construction and even immigration. All influence whether there is a buyer’s market, seller’s market or a balanced market.
A buyer’s market is when there are many more homes for sale than there are buyers. As a result, prices may drop over time as home owners become eager to sell their property.
A seller’s market is when interest rates are low so there are many qualified buyers and not many homes for sale. Buyers must make quick decisions and may face multiple offers on the home they have chosen to buy.
A Balanced Market occurs when interest rates are affordable and the number of buyers and sellers in the marketplace are equalized. The scales don't tip in either direction, meaning the market is normal without experiencing volatile swings.
To determine what kind of market we are experiencing we use a statistical measure called the Sales-to-Listing ratio.
According to CREA ( Canadian Real Estate Association) A sales-to-new listings ratio between 40 and 60 per cent is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively.
So, with this in mind, what kind of market is Nanaimo experiencing?
On January 1, 2015, based on sales activity for the year 2014, the sales to list ratio by property types was as follows:
Single Family Homes - 60% - Balanced to sellers’ market
Condos( apartments) - 44% - Balanced
Condos ( patio homes) -79% - Sellers’ Market
Townhouses - 56% - Balanced
Lots - 43% - Balanced
Interestingly the average sale prices increased in all property types except for condo apartments.
Property Type % of change in sale price from 2013 Average sale price at end of 2014
Single family homes +5% $370,760
Lots +7% $165,832
Condo (Apt.) -2% $214,974
Condos ( Patio homes) +3% $285,487
Condos ( Townhouses) +5% $261,047
Buyer's and seller's markets fluctuate. It is not unheard of to have more than one market type in the span of 12 months. When deciding whether it is time to buy or sell real estate it is important to review current market stats with your Realtor.