by Scott Lissa
on Tuesday, February 2nd, 2021 at 10:52pm.
Multiple bids common in February of 2021
Nanaimo house sales in January of 2021 have been red hot and extremely competitive, commonly with over 10 offers being received in all-out bidding wars. This competition has made homebuyers feel like they are missing out on one of the largest housing booms ever recorded on Vancouver Island.
↓ 57% Fewer Active Listings
↓ 4 fewer Days on Market
↑ 64% Increase in Sales
Nanaimo Average Single Detached Home Price, January 2021
Average home sale price compared to the previous four years of sales data.
Average Price by Property Type:
Avg Sale Price
Average Sale Price of Other Cities December 2020:
Price change 2019
Avg Sale Price
Considering the previous record-setting months in real estate, we assumed the market would cool off at the beginning of the year. We were wrong. In January, the average sale price per home in Nanaimo reached $680,000, $44,000 higher than the preceding month of December 2020. This price substantially higher than the average sale price in January of 2020, which only reached $544,000, nearly a 30% increase in one year. These prices show a continuing upward trend in single-detached house prices and signal that it is suitable for homeowners to sell in the coming months.
Let's face it: Nanaimo houses' price increases are primarily due to the low amount of home inventory on the market. In January 2021, there were only 128 single detached houses for sale in Nanaimo. That is exactly half the number of homes for sale when compared to January or 2020. We expect more homes to come on the market after the holidays; however, we have seen fewer homes on the market in January 2021 than in December 2020. This supply issue is the driving factor in the Nanaimo real estate market currently. With the lack of houses coming on the market and increasing demand, prices inevitably rise.
The average days-on-market (ADOM) for Nanaimo single-detached houses in January 2021 is the same as the preceding year, 18 days. This amount of time to complete a home purchase difficult to decrease in January due to notaries and the Land Title office being closed over the holidays. 18 day-on-market is extremely fast when you consider the amount of work required to purchase a home. To provide perspective on ADOM, a relatively quick home sale would take 45 days in year past.
Multiple offers are no longer the exception, they're currently the rule when selling a Nanaimo detached house. These multiple offers on sale houses are reflected in the asking price's achieved percentage reaching 100.8% in January 2021. This percentage has increased 2.3% the previous year in January. The achieved percentage of asking price (APAP) is an essential indicator for Nanaimo home sellers to understand when considering putting their home on the market. When this percentage is below 100%, the average home sales price is below the asking price at that time. When the APAP is above 100%, a seller can typically expect to receive offers above the asking price.
These statistics reinforce a hard fact that we're all aware of, real estate is expensive and competitive in the City of Nanaimo. Though this seems to benefit sellers primarily, they cannot sell their home in Nanaimo if the house can't be replaced. This predicament is the double-edged sword of a low supply, high demand market, which only further exacerbates the issue.
So what's to be done? Many think the low-interest rates are the primary driver of the market. However, that's not entirly correct. If the interest rate goes higher, more families will not be able to afford a home. This regulatory policy will reduce the demand, much like unemployment rates decrease when workers stop looking for jobs. The best option is to increase the supply of affordable homes on the market. We hope to see municipal, provincial and federal governments spearhead the issue and use the record taxation collected during the previous 12 months to help alleviate the strain. Hopefully, programs and incentives can be granted to private developers to work in partnership to create new housing opportunities on Vancouver Island. The ultimate goal is more people living the island life.