Buyers and sellers are facing a changing and more balanced market this year compared to 2018, forcing a change in tactics from both sides. (FreePik)

By Alex Rawnsley

CHANGING LANDSCAPE

Buyers, sellers adjusting to changing mid-island real estate market

Sep 11, 2019 | 5:14 AM

NANAIMO — A flood of new inventory, coupled with reduced sales volume is forcing a change in the local real estate market.

In year to date numbers from the Multiple Listing Service (MLS) Nanaimo saw an 18.5% increase in listings through Aug. 31, compared to the same period in 2018.

That increase was symbolized by one of the busier Labour Day long weekends in recent history where 36 properties were listed for sale in Nanaimo, compared to 20 the year prior.

Vancouver Island Real Estate Board (VIREB) president-elect Kevin Reid told NanaimoNewsNOW, seeing increased numbers around this time of year isn’t unusual, however the shear volume was.

“When we get a change of season and during benchmark times of the year when kids go back to school, the family wants to tidy up any projects or goals they’ve had on the go. This year, that translated into increased home sales.”

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The increased activity is symptomatic of a larger situation. As the real estate market adjusts, it levels the playing field between buyers and sellers.

“May, June and July the market really balanced out,” said Reid. “The big dollar buyer was not as available as they were in the last two years. Sellers had to adjust their pricing to the market conditions so they could actually affect a sale.”

The volume of listings and sales have change significantly in Nanaimo and Parksville/Qualicum, forcing buyers and sellers to adjust their tactics. (Alex Rawnsley/NanaimoNewsNOW)

One factor impacting buyers ability to compete in the market is the mortgage stress test, introduced in 2018. The test impacts the borrowing ability of home buyers who have less than a 20% down payment.

Reid said first time buyers are being forced to temper their expectations when they don’t qualify for as much as they would have before the tests introduction.

“There’s been a really high demand in that $250,000 to $450,000 price category, and these days you get a pretty nice town house for $400,000, while the single family home average prices soared well over $500,000 in almost every market.”

While Reid does not believe inventory will return to the record-breaking levels of the late 2000’s, he said the balanced market is providing more opportunities, and more choice.

“We’re not seeing the same number of bidding wars that we saw around 18 months ago. One thing we can zero in on, the person who bought in the last half of August is getting the house that was priced out of their range, and it’s now falling back in as those sellers seek to find opportunities.”

Despite the change in inventory levels, average home prices stayed somewhat steady in Nanaimo.

Single family houses increased just over one per cent in August 2019, compared to 2018. Parksville/Qualicum saw a sharper increase, up 3.3 per cent.

Townhouses are proving to very popular in Nanaimo, with the average sale price at $374,100 in August 2019, up from $355,400 just 12 months prior.

alex.rawnsley@jpbg.ca

On Twitter: @alexrawnsley