Spring Market in Nanaimo and Victoria

Hello all! It has been a while since we have posted on our blog. For those that have been coming back to our site to read up on the things we like to write about, we apologize for the break. We won’t leave you hanging again! The timing is right to write about our current market - SPRING MARKET!

The arrival of spring is often accompanied by a surge in real estate activity on Vancouver Island. This is generally because the warmer weather and longer daylight hours make it easier for people to get out and view homes. As a result, the spring market is typically one of the busiest times of the year for Nanaimo mortgage brokers and other mortgage and real estate professionals up and down the island!

One of the reasons for the increase in activity is that many buyers want to take advantage of the spring weather and move into their new homes before the summer months arrive. This is especially true for families with school-aged children, as they want to be settled into their new homes before the start of the next school year. Imagine packing little Elliot’s lunch when his lunch pack is packed away in a box somewhere – not ideal. Also, proximity to the school he is attending is important.

In addition to the weather, inventory is at an all-time yearly high! Many sellers choose to list their homes in the spring which means that there are more homes on the market for buyers to choose from. This can also create a more competitive environment for buyers – forcing them to act quickly if they find a home they are interested in.

Another factor that can impact the spring market is, of course, interest rates. Lower rates attract more buyers to enter the market. Low interest rates result in lower mortgage payments – something that we are all drawn to.

However, while the spring market can be a busy time for real estate, it is important for both buyers and sellers to be aware of the potential challenges that can arise. One of these challenges is the aforementioned increased competition which can make it more difficult for buyers to find the right home. Sellers may also face competition from other sellers who are listing their homes at the same time. So there is definitely a balancing act at play.

Other challenges that can arise in the spring market are those such as pricing. Sellers may be tempted to list their homes at higher prices given the increase in demand. Similarly, buyers may be tempted to offer less than the asking price in an attempt to get a better deal. This can lead to bidding wars and can drive up prices even further as history has shown.

According to the Canadian Real Estate Association (CREA), the national average price of a Canadian home sold in March 2018 was $491,000. This increased to $716,000 by March 2022. This represents a significant jump of approximately 46% over the past five years, indicating a strong demand for homes across Canada. In some major cities, such as Toronto and Vancouver, the price growth has been even more pronounced. In March 2018, the average price of a home in Toronto was $785,000, which increased to $1,098,000 in March 2022. Similarly, in Vancouver, the average price of a home in March 2018 was $1,014,000, which increased to $1,532,000 in March 2022.

Our island markets are not equal in value to the behemoth big city markets in the country, but we have seen our share of burgeoning local markets. In 2018, the average sale price of a single family dwelling in Nanaimo, British Columbia was $576,000. Recent stats show that number to be $936,000 as of February 2022 but higher interest rates and inflation have curved that amount significantly down to $794,000 as of last month. Yikes. It adds up in a cyclical sense because the increases could not continue.

Victoria values are closer to the big city markets in the country: in 2018 the average sale price of a single family dwelling was $1,056,000 and increased to $1,262,000 as of last year. The higher values are a direct result of Victoria remaining a desirable location for its natural beauty, mild climate, diverse range of amenities, and vibrant culture.

Overall, springtime in the Nanaimo, Victoria, and other island housing markets can be a busy and exciting time for both buyers and sellers. However, it is important for everyone involved to be aware of the potential challenges and to work with experienced real estate professionals who can help navigate the market. With the right approach, buyers and sellers can take advantage of the opportunities presented by this active time of the year and achieve their real estate goals.