Homes with Suites in Nanaimo - A Hot Commodity

The first quarter of 2021 has been a mad scramble for people listing and buying investment properties in Nanaimo. This was already an over-charged segment of the market through 2020 (Covid caused a lot of people to put their money into real estate outside of bigger cities), but in 2021 it's been even more frenzied.

In 2020 we saw a seller's market, with homes selling within a week or two. But in 2021, the following is a typical sight:

• Home is listed on a Tuesday
• Showings are only allowed Wednesday, Thursday, and Saturday.
• Showings can only be thirty minutes long (to accommodate large numbers of buyers)
• Offers reviewed on Sunday afternoon
• Big bidding war ensues

This activity is fueled in part by investors wanting to buy a home to rent, with a suite. A home with two living areas will rent for more than the same house without a suite. But a lot of it is also fueled by first-time buyers who want a place with a mortgage helper. The result is that the lower end of the market (let's say under $650k) is boiling over.

I ran the numbers for homes listed under $650,000: There were 60 homes with suites sold in the last 70 days in Nanaimo (this will include some homes with suite potential only). The average list price was $563,080 and the average sale price was $595,523. In other words, these homes are selling for $30,000 over asking price (essentially).

What it Means

If you are interested in the segment of the market discussed above, you have a big challenge ahead of you. Homes are selling before many people are even aware of them! And they are selling at prices beyond the original sticker price that drew the buyer to view. Here are my recommendations:

• Ask a realtor to set up an MLS account for you. This will send you an email as soon as there are new listings (according to your filters). 
• If a home has a suite and is "turn-key" (doesn't need any work before it can be inhabited/rented), you should expect it will go into a bidding war. 
• Don't view homes unless:
  • They are listed at least $30,000 below your maximum price, or
  • They have been listed for more than a week.

Good luck everybody. I hope that things will die down soon, and that there will be a small reduction in prices. That would be best for just about everyone.