NO REAL SURPRISES IN NOVEMBER AS TRENDS CONTINUE
Single Family Prices and Volume
98 single family homes were sold in November, down 8% from the 108 sold in the same time frame last year, and 14% less than were sold last month, which is not surprising given the time of year with the holidays approaching. The average sale price for a single family home remained stable at $472,137, down less than a percent ($1,088) from October, and still up almost 18% from the November 2015 average of $400,977. That said, the movement in the average price isn’t the only determining factor in assessing the strength of a market. The median sell price is relied upon as a secondary measure which will not be skewed by a few high priced homes selling at the top end of the market and November’s median price was $445,000, down approx. 1% month-over-month and almost 25% above last year’s figure. The variance between the median and average sale has closed considerably from levels experienced earlier in the year, suggesting that prices at the lower end of the market continue to climb at an accelerated pace.
Strength of the Trend
Factors we also look at when analyzing a market to validate its strength are sell/list ratio; sell price; days to sell, and current inventory numbers:
The sell/list ratio was flat month-over-month at 77%, but down nearly 26% year-over-year, although November 2015 was abnormally high at 104% and a strong leading indicator of the demand that followed into early 2016. 77% is still a very respectable number, suggesting market conditions remain relatively strong.
The sell price/list price remained strong at 99%, as was the case in October. This figure was up from 96% a year earlier, suggesting there is still sustained upward pressure on pricing.
The average number of days on the market increased from 20 to 26 month-over-month, however it was down from 50 days in November 2015, representing a 48% decline year-over-year, suggesting that attractive offerings continue to sell far quicker than seen over the past number of years and explaining why buyers still need to act quickly to avoid missing choice opportunities. Of note, entry level homes around the $300,000 mark continue to see frequent multiple offer situations, making it all the more vital that buyers are prequalified for financing and ready to act when they see a property they would like to move on.
The number of active listings is down to 229 from 233, and inventory numbers are down nearly 17% from November 2015’s levels. However, it should be noted that the gap is closing as October saw a year-over-year decrease of 39%. With subdued inventory levels, it is no surprise that buyers continue to struggle to find suitable properties.
Top Performing Neighbourhoods & Categories
In November, of the 18 sub-areas defined by the real estate board in Nanaimo, 39% saw an increase in the average selling price between October and November, and 83%, or 15 of the 18 saw increased prices year-over-year. Despite the headlines, not all neighbourhoods are moving in the same direction all the time. With real estate being location specific, it is vital to know what is going on in your area when determining whether the timing may be right to sell your home. For buyers, neighbourhoods will experience differing price action throughout the cycle. Again, it pays to know what is happening in each sub-area, to determine whether a purchase would be prudent.
For single family homes, at the lower end of the pricing spectrum Uplands, South Nanaimo, and South Jingle Pot all experienced strong month-over-month and year-over-year average price increases. Consistent top performers North Nanaimo and more notably Departure Bay experienced strong months, with Departure Bay up nearly 16% month-over-month and nearly 37% year-over-year, albeit on lower volumes. Departure Bay continues to be ripe for revitalization as the area with an ideal location, lifestyle, and views is restored to its former glory. With limited inventory, homes continue to go quickly and multiple offer situations are not uncommon.
Lots were undoubtedly the top performing category in November, up nearly 25% from October and up 45% year-over-year on increased volume. Given the rapid price escalation and limited inventory numbers it is not a huge surprise that lots are leading the way at this stage in the cycle. At this point, It is important to caution aspiring developers that lots are often the last to rise in a real estate cycle, and will also be the hardest to unload if you get caught in a correction as profit margins evaporate. Year-over-year, the average prices across all categories are up between 17% (single-family) and 45% (lots), impressive numbers to say the least.
Opportunities
Historically, December and January see the lowest number of transactions throughout the year as the holiday season and miserable weather keep buyers on the sidelines. Despite this, job relocations, growing families, separations, and estate liquidations still result in a solid number of motivated sellers eagerly awaiting a buyer. In a strong market such as we are experiencing, this may be a chance for an opportunistic buyer or investor to find a decent deal. Watch for price drops to signal motivation. Many think that waiting until spring to buy may result in additional choices with more listings. What they fail to take into consideration is competition as the number of buyers looking will significantly increase as well. If you have been frustrated by losing homes in multiple offer situations, the next month or two could be a window for you to get in without having to fight the competition. Looking back to the past couple of years, the buyers we represented in the winter months secured some of what now appear to be the best deals of the respective years.
If you have any questions about market conditions or would like more details specific to your neighbourhood, please contact us at info@jahelkagroup.com and we would be happy to help.
Check out the Nanaimo Market Statistics Here
Source: VIREB