The Nanaimo Real Estate Market began to really open up in May. Ready or not, here we come together, let’s double our bubbles. Even if it feels… well… kinda wierd.
Homes are being listed and buyers are buying, and the sun is out. It all looks kinda normal, except for the unprecedented 50% drop in home sales and listings.
But first a step back.
This was going to be the breakout spring market for Canadian Real Estate after two years of weak sales. It was to be the year that big demand faced short supply. It was to be a spring full of multiple offers, and rising prices. In other words a hot “Seller’s” market.
Clearly things did not play out the way we planned.
What seems to be happening now is a sort of weird Covid balancing effect where a roughly 50% drop in homes sold in Nanaimo is pretty much offset by a corresponding 50% drop in listings. That helped our Benchmark price for a typical detached Nanaimo family home to rise over 1%. And we are seeing more and more multiple offer scenarios on sharply priced properties under $600,000.
COVID CRUSHED DEMAND IN APRIL
April 2020 will stand the test of time as the month that saw the world economy take a nose dive like never before, and a month that saw far too many people around the world, leave it forever.
In April 2019 there were 19,146 showing requests across the VIREB Region (basically North of Victoria). In April of this year there were 4,881. That is essentially a 75% drop in demand. The silver lining of which is that well over half the showings in April occurred in the last 10 days of the month. Implying Buyers may be starting to reenter the market more and more as time progresses.
Looking at this graph to the right you can see the traditional Spring Market trajectory at the beginning of March 2019. See how the sales volume goes almost vertical. Normal for the onset of the spring market. Compare that with March 2020 on the right side, and the effect of Covid is obvious.
As compared to April 2019, The number of detached homes sold in Nanaimo fell in April 2020 by nearly half, or 47%, while Condo and Townhome sales fell a whopping 70%.
As for Listings, they seemed to mirror the drop in sales with a 47% drop in detached homes listed for sale in Nanaimo this year versus last while there was a 58% drop overall in condo and townhouse sales.
Basically a simultaneous drop in both demand AND supply. Unheard of in Real estate where the market is typically either a Seller’s or Buyer’s market or a balanced between the two. Not sure what we call a market that is none of the above. Counter-balanced?
Selling, or Buying, a home during a Pandemic is a relative concept.
Some folks are waiting for a vaccine before buying or selling. Others are very active right now. Others must sell or buy now, while others may be starting to feel more comfortable and may go out to look at homes as BC restarts.
As a Realtor going into people’s homes regularly, I admit it can feel a bit unnerving at first. Thankfully, the Canadian and BC Real Estate Associations, CREA and the BCREA, have issued detailed Covid guidance for Realtors.
With BC doing so well, and Vancouver Island practically Covid free, (for now), I anticipate more and more buyers returning to the market as more people feel safe going into other people’s homes. There is a definite uptake in both sales and listings from April — although we will not know for sure how the market performed in May until month end or early June.
I think market activity will continue to pick up into the summer, albeit at a much lower volume than before.
Beyond that, it’s anyones guess.