Nanaimo Real Estate - Summer 2024 Market Update

A Balancing Out

The most recent peak real estate prices was in the spring of 2022. In the two years since, things have been un-dramatic; prices dropped up to 15% in some areas especially nearing the end of 2022, but they have recovered some of that value, since. There have been brief periods of very sluggish activity followed by little rallies that don't last very long.

Overall the trend has been toward MUCH more inventory than we have seen in other recent years, giving buyers a chance to be choosy, to negotiate on pricing and other terms. But it's not a bloodbath; while some sellers have taken big hits if they had an urgent need to move and were spooked by several weeks without offers, it is still considered a sellers' market in the sense that homes are still moving within a month or so in most cases. This may be about to change, however.

The July 2024 market update from the Vancouver Island Board of REALTORS® (VIREB) notes that the NUMBER of sales in July were down about 7% from the same time in 2023 (which was itself a flaccid market!) along with a 30% increase in the number of listings.

Some of the swell may be attributable to builders and developers who made big plans during the heyday years of 2020-2022, and whose builds are starting to get occupancy. It certainly appears, in Nanaimo at least, that a lot of rental apartments have completed in a short time span and must be absorbing much of the demand for real estate properties.

Townhome sales represent an anomaly; while the sales of detached houses and apartment condos were down about 10% compared to last July, the sales of townhouses were UP about 15%. I assume this is related to affordability - more people who would LIKE to buy a detached house are forced to get a townhome as an interim step. And maybe some people are moving out of condo apartments and into townhomes, because gardening is more in vogue? (If indeed it is)

I've been watching for a wave of purchases, maybe from "Vancouver investors", of detached homes with room for additional density on the lot - because of the announcement this year of relaxed zoning/density regulations - it is now much easier to build additional dwellings on many city lots. This is ideal for the older, larger lots we have in many parts of Nanaimo, especially in areas with high rental demand. Perhaps the investors are cautious because the tradespeople may not be available to work on carriage houses and basement suites.

Looking ahead: It's expected that further interest rate cuts in the next few quarters will prompt more buying activity. New surges in immigration may also increase demand, whether it's international or just the usual Canadian migration westward, often pulsing according to job flows in Alberta or ageing patterns in Ontario. Regardless, I am confident we will continue to have upward trends (punctuated with intermittent lows/slows) as the mid-Island inevitably develops to support a growing population.