Here is an article in Nanaimo Daily News about Nanaimo's real estate market toward the end of 2008.
http://www.canada.com/nanaimodailynews/news/story.html?id=be718129-ebc3-4196-a732-bc7a88b6c399
Housing sales fell by almost 50% last month in Nanaimo, and real estate prices appear to be edging down as a result.
The Vancouver Island Real Estate Board's December sales figures show 43 units sold, compared to 83 in the same month for 2007.
The prices already are edging down due to slow sales. The List Price/Sale Price ratio for houses was 91% in December. This means that the average house sold for 9% off of the listed price (It may even have been listed for higher previously), meaning that a 400k listed house would have sold for 364k. Surely there are people out there who are smart enough to forward offers of 15% off list price.
Sales figures alone don't tell the whole picture. There were 512 active house listings and only 43 sold. This means only 1 out of 12 houses sold so any one house has about 8% chance of selling. Only 17 out of 341 Condo/Townhouse listings sold. That is about 1 out of 20 with a 5% chance of selling.
Realtors are watching Nanaimo's real estate inventory grow, and a resulting affect on selling prices.
"We're seeing prices change but likely that house that didn't sell for $600,000 last year was probably overpriced," said Nanaimo realtor Jim Stewart.
Buyers and sellers are witnessing market forces at work. As the number of homes for sale rises, it sways market conditions in favour of home buyers, pushing prices down.
The very few houses that are actually selling are selling at a discount. Many sellers still have too high of expectations and won't lower their asking prices or price below competition to get it sold. They are chasing the market down. If the current conditions continue, there will be massive supply come spring, forcing sellers to cut prices even more. How about a strategy of monthly price reductions instead of waiting 2 or 3 months?
Stats available here: http://www.relocationbc.com/stats/08Dec/NanaimoDec08Graphstats.pdf
Subscribe to:
Post Comments (Atom)
A side note to the poster who said he isn't getting much business from realtor clients. Roger has estimated that the realty commission pie has gone down 25%, meaning on average that someone who made 80k last year is now making 60k. I hope the realtors realized there are good and bad times and that they planned finances accordingly.
ReplyDeleteGood point. I suspect many are making a lot less. I remember reading something about sales volumes in either Freaknomics or the Tipping Point that with real estate the 80/20 rule applies. 20% of realtors sell 80% of homes.
ReplyDeleteJust saw this today in the Nanaimo Daily News:
ReplyDeleteHome building slows with economic troubles
Cracks are appearing in Nanaimo's housing industry.
Housing starts fell to 51 in December, from 84 in the same month in 2007, the Canada Mortgage Housing Corp. said Friday.....
"One of the things I suspect will occur and I'm hearing it anecdotally is spec (home) construction will drop," Hutchinson said.
Rob McCallum, Nanaimo president of the B.C. Homebuilders' Association, agrees.
"I would say it's primarily the spec guys who have everything on hold, they're not rushing out to build houses," McCallum said.
At city hall, just five building permits were issued for single-family homes in December, compared to 29 in the same month a year earlier.
The reason why sellers are keeping their prices high is because they are HILLBILLYS and don't know any better. Tons of these islandbillys live in NANAIMO with stupid Remax signs rotting on their lawn. The realtors are hicks and unprofessional, so they live in perfect harmony.
ReplyDeleteIve been getting the PCS from a local re agent for a couple of years now and have been seeing recently many more reasonably priced homes listed and price reductions- and the (relatively few) sales seem to offer real good value for money--- which is why they sold. Its a new market for sure, but I think Nanaimo may have bottomed out price wise (except for older stagnant listings which have not recognized reality). Compare prices here with Victoria which still remains in fantasy island with hundreds of listings from dreamers trying to sell million dollar plus homes.
ReplyDeleteThe dreamers here are the luxury condo developers it'll take years to clean up that overpriced inventory.
Bruno what makes you think we have hit bottom? Who do you think is going to be buying up the places here? Do you believe things will suddenly turn around?
ReplyDeleteI'm not talking about a "sudden turn around" with immediate price increases- but a bottoming out for entry level which can help support the market. There are many recent entry level listings back at the price point where a purchaser with a reasonable down payment can carry the mortgage for about the same as renting the equivalent home.
ReplyDeleteSo in a word-affordability.
The other reasons I could list would make me sound like a real estate agent promoting the market-which Im not.
How is the months of inventory doing?
ReplyDeleteTesting
ReplyDeleteHey Nanhousing,
ReplyDeletegood analysis, but I would expect things to continue downward, contrary to Bruno. When I look further up island you can see prices have really dropped off. I think in general when you see Nanaimo area volume and pricing approaching levels set in 2004 (or earlier!) you can start to look for a bottom.
End now? That's wishful thinking in a resource town given the current state of the economy and likely tourism numbers this summer - but we shall see.
BTW, I was happy to see a new post and that I could post a reply here - before something was preventing these posts from being saved.
greg-nanaimo isn't a resource town any more than victoria is these days.
ReplyDeleteit's a transportation hub and "shopping" town for the central island and judging from the malls, there are still lots of happy consumers around
All I can say is wow. That is a lot of information. Thanks for the great read! :)
ReplyDeletemanila condominiums