January 2023 Nanaimo Market Update
December marked the end of another year in the Nanaimo real estate market. Nanaimo is starting the new year with an increase in the amount of sales from November to December. This increase in sales also comes with an increase to the average home price.
Months of Inventory
In December, the Nanaimo real estate market saw a shift in supply and demand. December saw a large increase in the transactions to sales ratio. While month over month inventory was staying on the market and new listings were being piled on top, December saw the sale to list ratio go to 142.22%. This reduces the months of inventory to 4 months. Months of Inventory is an important statistic to consider because it can give a solid indication of the direction of home prices. As the months of inventory gets lower, this signals a seller’s market where home prices appreciate. This is caused by limited inventory pushing buyers attention to a smaller number of listings and, in most cases, more competition writing offers on said properties. As this number starts to climb higher, we hit a point where it is considered a buyer’s market. In these instances, prices start to decrease as buyers have more properties to choose from and are able to take their time before writing offers. There is also a balance in the middle of these two extremes in where property prices stay consistent, there is enough sales to move housing inventory, and new listings are filling the place of listings that have been sold. We consider this balanced market to be anywhere between 4 and 7 months
The average home price in Nanaimo for December was $773,795, an increase from November where the average home price was $755,586. This average price is still a 15.03% decrease from December of last year. This decrease is in part due to difference in transaction values from 2021 to 2022. In December 2022, the $800-900,000 range had the most transactions, with more transactions at lower price points happening. In December of 2021, the most transactions occurred in the same price point, but with more transactions in higher price points, increasing the average price.
Looking at the median sale price provides is a good indicator of how the market has moved because it shows the middle of the range from the lowest to highest transaction. For 2022 this was $745,000 compared to $839,000 in December of 2021.
With December typically being a month where people spend more time with family and friends, we usually see the amount of listings and transaction in the month of December drop compared to November. This year, while we did see a decrease in the number of new listings, the amount of transactions month over month increased from 55 transactions in November to 64 in December.
While the increase in transactions may not be enough to have a large impact on the real estate market at this time, if we continue to have increased transactions, and the decreased new inventory we saw in the month of December there is potential for the market to shift and increase average prices as we have seen in recent years.