Monthly Market Recap: July 2016


Under Nanaimo


Written by on August 3rd, 2016

After Months of Gains, Market Cools in July …

Single Family Prices and Volume

147 single family homes were sold in July, down noticeably from 204 in June, and down slightly from the 149 sold in July of 2015. The average sale price for a single family home dipped to  $423,511; representing nearly a 9.21% decrease from June average of $466,490, but still up 10% from the July 2015 average. These numbers are a marked departure from the previous 3 months of accelerated increasing prices, but not surprising given the time of year. Last July also saw a noticeable pullback in average prices and volume, however not as drastic as we have seen this year. However, it must clearly be stated that the average price increases aren’t the only determining factor in assessing the strength of a market. The median sell price is relied upon as a secondary measure which will not be skewed by a few high priced homes selling at the top end of the market. July’s median price was $385,000, down 12.48%  month-over-month, but still slightly above last year’s figure.

Strength of the Trend

Factors we also look at when analyzing a market to validate its strength are sell/list ratio; sell price; days to sell, and current inventory numbers:

The sell/list ratio decreased month-over-month from 83% in June to 72% in July, also declining from 74% a year earlier.

The sell price/list price ticked down slightly to 99% from 100% in June. Of course, not all homes are selling at 99% the ask price as many competitive offerings are continuing to sell  above the asking price, offset by overpriced and less desirable homes that are selling below the ask price. 99% is still up from 97% that we saw last July. Interestingly, the average number of  days on the market was down a further 23% from June to 17 days. This is a 50% reduction from July of last year suggesting attractive offerings are still selling far quicker and closer to the ask price than we have experienced over the past number of years.

Current inventory numbers increased from 308 to 327, hopefully providing some relief for buyers who have struggled to lock down properties as demand has outpaced for much of 2016.  However, in comparison to last July, inventory numbers are down approx. 30% so if you are currently searching for a home and you are finding that it seems like there not many options to choose from, you are certainly right.

July marks the first month of declining average prices in 2016. After months of improving conditions a pullback is likely warranted and was somewhat expected given the time of year with children and families enjoying summer holidays and other recreational endeavours. Although a 9% month-over-month decrease is concerning, at this point it is far too early to tell whether the market has peaked, so stay tuned for updates over the next number of months.

Top Performing Neighbourhoods & Categories

Price wise, the Old City, South Jingle Pot and Diver Lake were the top performing areas, albeit on decreasing volume. 11 of the 18 sub-areas saw average month-over-month price decreases, with 14 of 18 experiencing declining volume.

The category that lead the way in July was townhomes, with average prices up 11.38% month-over-month and 33% year over year on increasing volume. Condos, patio homes and waterfront homes also saw price average price, contrasting hots and single family homes which were down.  


Rather than highlighting areas and asset classes with strong investment potential, this month we are going to discuss how the coming fall market may represent a good opportunity for you to sell, realizing substantial gains on massive price increases on properties purchased in years gone by.

Given the dynamic nature of our economy with real estate conditions the result of an interplay of countless variables, trying to time the top of a market to maximize your return is a extremely risky endeavor, and one we wouldn’t recommend. Late in 2015 and early in 2016 we provided market evaluations for clients who didn’t hear the numbers they were looking for to list. At this point, most say, “when it gets to $XXX,XXX, let us know and we will list.” For most, that number has come and gone, yet human nature has come into play whereby people are fearful of cashing in and and losing out on a potentially larger return if conditions continue upward.

The reality is the markets will peak, and they will turn downward. Real Estate markets are cyclical, and this move is inevitable, it’s just a matter of when. What we often tell clients is to pick a number and stick to it, because if the market turns and you get caught, there is a good chance you will ride it down, in hopes of one day getting back to the number that you happily would have sold at in the first place.

We are by no means suggesting that now is the time to sell for everyone, as individual circumstances differ, as do investment objectives, etc. What we are saying is that if you are risk averse, and seeing your home value down $50,000 $100,000 from its current value would cause you to lose sleep at night, the fall market may present you with a good opportunity to get out with a very respectable return, as it wouldn’t take too many more 9% month-over-month decreases to erase the recent gains. For a consultation specific to your situation, please feel free to contact us anytime.

If you have any questions about market conditions or would like more details specific to your neighbourhood, please contact us at info@jahelkagroup.com and we would be happy to help.

Check out the Nanaimo Market Statistics here: Market Statistics Nanaimo July 2016

Source: VIREB