As anticipated, mid island real estate is shifting into a balanced market. Niche properties, such as single family homes under $600K, are seeing increased pricing & holding strong, some even with multiple offers – this compressed market has remained competitive for the many Buyers still entering or re-entering the market.
Many Sellers are having to lower their expectations from past years. A sharp price & well maintained home will set it apart, especially in higher end properties which was hit harder by the 20% foreign Buyer tax as many foreigners elect to invest elsewhere – less Buyers with big payouts are flowing from the mainland & Victoria to fuel our high-end housing market.
New construction is taking longer to move due to affordability. Most Builders are not showing much give on pricing – profit margins have to make sense to continue building. Expect a slowdown in the new construction starts in the coming year as Builders combat increased lot prices (19% gain this year over last!), increased cost of construction materials plus building code changes.
The biggest market impact? Reduced qualification for Buyer mortgages = less sales in general. Prices are expected to increase 2.1% in BC for 2019. Expect 2019 to be our market high for most homes over the next 5-8 years. It's a great time to buy as negotiation is more prominent & there is an increase of selection to choose from. In a balanced market Seller's benefit if moving to another home within the same market as "subject to sale of my house" clauses are more likely to be accepted which help alleviate the 'where am I going to go' stress.
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Despite doom & gloom real estate headlines around the BC Province this past year (focused on the correction of the Vancouver real estate market), Central Vancouver Island real estate has maintained solid numbers, depending on your price point. This year we are shifting from a Sellers Market to a balanced market across the central Nanaimo, Cowichan Valley & Parksville regions. From a general single family home perspective, $0-$700,000 you are still in a Seller's market with less than 4 months of inventory (although this max price point is creeping to a reduced number). Moving up between $700,000-$825,000 you are in a balanced market feeling less pressure when Buying & having to price sharply when selling. In the luxury $825,000+ market, expect more negotiation room & inventory to choose from as a Buyer or compete against as a Seller, as you are in a Buyer's Market.
Whichever segment your property falls into, pricing at market value and having a strategic marketing plan is as important as ever to obtaining the best price & terms. Buyers are educated & most will wait until it's priced accordingly as opposed to submitting a lower priced offer. Although average days on market is a month, we are witnessing an increased number of price reductions within that time as those seeking previous year market pricing are getting a reality check when their listing isn't selling, many re-listing at a lower price which then sells within the typical one month listing period.
The biggest factors that have impacted our pricing is the B-20 Mortgage Stress Test (reducing Buyer's qualification) which took effect January 1, 2018. Our inventory & more impact-fully our high-end inventory has been affected by the government's addition of a Foreign Buyer Tax & Speculation tax - also known as a vacant homes tax. This is applicable in cities of Vancouver, Victoria, Nanaimo, Fraser Valley & Kelowna; despite leaving out Parksville, Cowichan Valley, Whistler & other areas of BC, foreign and canadian investors alike have concentrated investments elsewhere for fear of expansion within BC (or improper assumption that this blankets all of BC). Most notably, Ontario has been the recipient of new investment.
We experienced a later spring market & with sales in full swing over the summer, we expect more inventory in the fall, with a reasonable number of Buyers to remain looking for a fair deal.
Contact us at 250-668-3633 or email@example.com for your current market evaluation of your home or if seeking a new home, we'd love to help. It's your biggest investment & we will work for your trust.
Invested in your success, Mandy
Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!
You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.
We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.