A Look Back at September's Market Stats
September saw a further decrease in the average home price in Nanaimo. September’s average single family home price was $801,021 – a decrease of 9.1% from August of 2022, and a decrease of 3.7% from September of last year. There are a few factors at play that have caused this decrease in average sale price, the biggest of which being the shift in supply and demand.
In September there were 49 units reported sold. This is a decrease of 63.7% from September of 2021 where 130 homes were reported sold. This decrease in sales goes to show that there has been a decrease in demand in the real estate market that can be attributed to increased interest rates, inflation, and cost of living. In addition to this decrease in units reported sold, there was also a 42.74% increase in the number of listings compared to September of 2021. This has given buyers an overwhelming amount of purchase options and led to an increase in the average days on market as more offers contained subjects as well as offers containing subject to the sale of another property.
For buyers, increased interest rates mean higher costs of borrowing and lower mortgage qualifying amounts caused by the amount of mortgage payment going to principal vs. interest. With the larger increases in interest rates and uncertainty with how high interest rates will climb, some buyers have decided to pause their search to see how high interest rates will go before stabilizing. For buyers continuing their home search, the changes that we have seen in the market have contributed to a longer days on market (51 days) compared to September of 2021. This increase in days on market and active listings has attributed to reducing the sale to list price ratio to 97.52% vs. 102.44% in September of 2021. There were also more properties decreasing their listing price. September saw 94 price changes to single family homes, which is about a quarter of all active single family home listings in September.
For sellers, these changes in the market highlight the importance of strategic marketing and home pricing, as well as the need to make their home presentable. With increased competition in every segment of homes, it’s important to have your home listing stand out and provide as much information to prospective buyers as possible. It is also important to know the buyer profile that your home will attract and effectively presenting your home to these buyers.
Remember that we are in a market where homes aren’t selling within days of being listed. The current months of inventory for single family homes for September was 7.7. This means that with the number of sales recorded for the month compared to the number of active listings there is enough supply for the market to continue this way for the next 8 months. For comparison, the months of inventory for September 2021 was 1.1, which meant that almost every home being listed was sold in the same month. With a 42.74% increase in the number of homes listed compared to 2021 and the 62.31% decrease in homes sold, inventory has continued to rise month over month, adding to the competitive landscape that sellers are currently facing.