The sales stats at the end of May 2020 indicate the market is continuing the downward trend that started in April. However, these numbers likely reflect the slowing of the Market due to the impact of the COVID-19 shut down. Prices are down slightly ( -2%) and unit sales are way down as compared to May 2019. The lock-down really affected the number of active buyer’s in the marketplace in May. The biggest changes year-to-date seem to be that at the end of May 2020 there were 34% fewer homes listed as compared to those listed in May 2019 and the number of homes sold were also down by 47%. The average sale price for single family homes was down by 2%, Apartment style condos was equal to May 2019 as were patio homes. The biggest change in average sale price were townhouses which were down by 11%.
Based on the stats that VIREB (Vancouver Island Real Estate Board) have supplied, I am able to summarize the market as follows:
Below are the types of real estate sold in May 2020(source VIREB) in Nanaimo:
|Property Type||# of sold unit’s||Average price|
The average single-family home was taking 4% more days to sell than in May 2019.
The Sell/List ratio is the percentage of houses that were listed that sold. In May 2020, the Sell/List ratio was 44% which was 12% lower than in May 2019.
Sales of apartment style condos was down by 21% from May 2019 and were taking 121% more days to sell than in May 2019.
Sales of townhouse units were down by 60% from May 2019. They were taking 26% fewer days to sell, and the average sale price was 11% lower in May 2020 than in May 2019.
The sales of patio homes were down by 56% in May 2020 as compared to May 2019. The average sale price for patio homes was 11% lower in May 2020 as compared to May 2019.
Overall, the market in May 2020 was down. However, prices continue to rise in all property types year-to-date except for lots.
Absorption Rates for single family homes in May 2020 as compared to May 2019
The above stats are informative but to get a true picture of how the local market is doing we need to calculate absorption rates. The definition of absorption rates is the number of weeks it takes to sell the current real estate inventory in Nanaimo at the present rate of sales.
Below you will find a comparison between absorption rates this year versus last year.
The absorption rate for single family homes in Nanaimo as at May 31, 2020 compared to May 31, 2019
May 31, 2020 – 19.19 weeks to sell the inventory that was currently on hand at the end of May.
May 31, 2019 – 12.17 weeks to sell the inventory that was currently on hand at the end of May.
As a rule of thumb, a Sellers market has less than 3 months of inventory, a Balanced market has between 3-6 months of inventory and a Buyer’s market has over 6 months.
The absorption rate indicates that we are still experiencing a balanced market.
A Balanced market is just that; a market where there are a similar number of buyer’s looking to buy real estate as there are sellers hoping to sell.