Real Estate in Nanaimo - Absorption rates for April 2013
The question I am most frequently, as a Nanaimo Realtor is “How’s the market in Nanaimo?”. The best way to understand how the local real estate market is doing is to calculate the 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.
April 2013 was a busy month for single family homes sales in Nanaimo. There were many Sold signs all over Nanaimo. With that in mind I was interested to see what the absorption rates would be.
My numbers come from the latest real estate stats published by VIREB (Vancouver Island Real Estate Board). Based on the information they have supplied I have calculated the absorption rates for real estate here in Nanaimo as of the end of April 2013.
By tracking these numbers monthly it helps me understand better what type of real estate market Nanaimo is experiencing. In addition, these absorption rates assist me in advising my clients on realistic expectations on the length of time it will take to sell their home.
The April 2013 absorption rate is lower by 3.51 weeks than it was in April 2012. In other words it is taking less time ( 3.51 fewer weeks) to absorb (or sale) the entire inventory currently on the market.
The absorption rate of single family homes in Nanaimo in April 2013 was 19.88 weeks
An absorption rate of 19.88 weeks indicates that the Nanaimo real estate market was experiencing a more balanced market leaning towards a sellers’ market in the month of April. As it stands now we have over 4.97 months of inventory on the market.
Absorption rates should be calculated monthly in order to get an accurate reading of the current market. It is quite possible that once the spring market slows down these numbers could change dramatically, whereby we could be back to experiencing a buyers’ market.
The definition of a Buyer’s market is:
A situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.
The definition of a Balanced Market according to Realtor Magazine is:
A balanced market has 5-6 months of inventory. Eg: If 100 houses sell a month, there should be 500-600 houses in active inventory.
The definition of a Sellers’ market is:
A seller’s market has less than 5 months of inventory. Listing inventory is low but there are many buyers looking at the same inventory. This is the type of market where you often see multiple offers going on.
For additional information on absorption rates and other stats on the state of the Nanaimo real estate market please give me a call.