While July 2022 marked the start of declining real estate prices and transactions, the Nanaimo real estate market has been steadily recovering month over month, meaning all sectors of the Nanaimo real estate market have seen shorter days on market, sale prices closer (and sometimes over) the list price, and an increase to the average price comparing May to April of 2023. The month of May 2023 witnessed promising indicators that the market is getting back to where it was before the decline.
In May 2023, the average number of days on the market for single-family homes decreased to 31, compared to 37 in April 2023. This decrease in average days on market shows that an increase in demand has Buyers making quicker decisions when it comes to purchasing a home. This is sparked by an increase in properties with a good value for the price accepting offers within the first few days of being listed. In May of 2022, which was close to the peak of our pandemic real estate market, the average days on market was 17, which could signal that the current days on market continues to decrease as demand stays ahead of supply. Moreover, the average price for single-family homes in May 2023 rose to $830,048, compared to the previous month's average price of $814,577. Although still lower than the average price in May 2022 ($892,498), the market is slowly inching closer to pre-slowdown levels.
The sale-to-list ratio increased to 99.66% in May 2023 from 98.82% in April 2023. A part of this increase is due to properties selling over the asking price. With more multiple offer situations happening, Buyers have to adjust their offer strategy to stay competitive. As home start to sell over the asking price more commonly, Sellers will start to list their homes for a higher price. Combining Buyers changing their offer strategies with an increase in listing prices, the average home price starts to climb at a more rapid pace. Additionally, the months of inventory decreased from 2.3 in April 2023 to 2.0 in May 2023 for single-family homes. This decrease indicates that demand is outpacing supply, which creates scarcity in the market.
Similar to single-family homes, the townhome segment of the Nanaimo real estate market saw positive growth in May 2023. The average number of days on the market for townhomes decreased significantly from 48 in April 2023 to 28 in May 2023, indicating an increased demand and a faster selling process.
The average price of townhomes rose to $623,424 in May 2023, a notable increase from $552,176 in April 2023. Although still below the average price in May 2022 ($606,876), this upward trend combined with the decrease in days on market suggests that demand has increased fairly significantly.
The sale-to-list ratio for townhomes in May 2023 reached 99.64%, up from 98.74% in April of 2023. With the decrease in days on market and the increase in average price, this indicates that townhome Sellers have already been able to start listing higher than they were last month, but that they are also selling more successfully than the lower priced inventory last month. Townhome inventory does typically see a larger increase when the single family home prices start to increase due to Buyers changing their search strategy as they get closer to being priced out of single family homes.
The condo segment of the Nanaimo real estate market also showed signs of recovery in May 2023. The average number of days on the market decreased from 45 in April 2023 to 36 in May 2023, suggesting an increased demand for condos.
The average price of condos in May 2023 ($469,675) was slightly higher than in April 2023 ($444,254), and increased year over year from May 2022 ($459,106). The sale-to-list ratio remained fairly stable month over month, which indicates that the asking price for condos increased, but hasn’t felt the same market impacts from multiple offers as townhomes and the single family market.
The number of new condo listings remained relatively stable, with 43 listings in May 2023 compared to 42 in April 2023. Additionally, condo sales remained consistent with 24 units sold in both April and May 2023. These figures support that demand for condos has remained more consistent than the rest of the market, but that the demand is still outpacing supply to some degree.
The Nanaimo real estate market in May 2023 demonstrated positive signs of recovery, indicating a return to the market conditions observed before the slowdown in July 2022. A big difference that we have seen in this current market of multiple offers compared to the pandemic market is that the majority of homes sold over the asking price in the month of May still had subjects on them. Compared to the times of almost every offer being unconditional, this has given Buyers the opportunity to write competitive offers while still protecting their interests.
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