Housing markets across the nation have been booming during the COVID-19 pandemic, and Ladysmith is no different.
Zone 3 director for the Vancouver Island Real Estate Board (VIREB) and real estate agent with Royal LePage Ladysmith, Susan Perrey said that two big factors driving the market are a lack of inventory, and historically low interest rates.
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“If homes are priced correctly, then homes are moving quite rapidly. Likely in multiple offers,” Perrey said.
Homes ranging from $400,000 to $700,000 are the fastest sellers; however even homes priced closer to $1 million are moving quickly. Perrey said that buyers purchasing more expensive homes are taking advantage of low interest rates to qualify at higher rates.
“Their payments at under two percent are providing them maybe a bigger and better house — a higher price of course — for similar payments.”
Typically, home buyers in Ladysmith come from other parts of British Columbia, or Alberta — cashing in on equity they’ve built up in their homes to move to Vancouver Island. These buyers compete with young families and first time buyers.
“The difficulty is not necessarily geographically where the people are coming from. I think it could be people who are a little bit older and have the funds to move into a house without that financing clause in there — a first time buyer is going to have a lot of clauses in there like inspections, financing, and all that, which may hinder them if they’re in a multiple offer,” Perrey said.
Perrey has encountered many multiple offers recently. She recalled a listing that received six offers after only being listed for five days.
“One of the realtors said, ‘Sue, this is the sixth offer that we’ve been in a multiple offer situation and lost’. It may seem like the market is super busy, and realtors are making money, but there’s a lot of difficulty out there right now because of our inventory.”
High demand has continued throughout the VIREB area. According to VIREB market statistics, there were 1,066 unit sales across all categories in October 2020 compared to 721 in October 2019. VIREB anticipates a 7.9 percent increase in sales in 2021.
A combination of low inventory, high demand, and COVID-19 safety precautions, mean that only serious buyers are being shown listings. And financial stresses borne by the pandemic have added additional barriers for first time buyers.
With the high competition, and anxieties around COVID, Perrey said that potential buyers should strongly consider working with local realtors.
“Realtors are going to make sure that buyers are qualified before they’re even stepping into the door,” Perrey said. “We’re really having to find out from our buyers how far they’ve come along with getting themselves ready to purchase a home. The sellers are making requests as well, some are even asking for proof that they’ve been pre-qualified.”
Perrey said that real estate agents are operating under enhanced safety protocols — using hand sanitizers, wearing masks, social distancing, and sanitizing touch surfaces.
“I’ve been in busy markets, but I haven’t been in one that has the fear of the pandemic that’s going on as well,” she said.
Fear of COVID-19, and the stress of a competitive market has led to some potential buyers leaving the market entirely, opting to continue renting until the market slows down.
On the opposite end of things, some buyers are motivated to purchase a new home because of the pandemic. Vancouver Island has recorded relatively low COVID cases compared to other jurisdictions. The shift to working from home has also encouraged some buyers to seek bigger homes outside of major metropolitan areas.
“We’re pretty fortunate to be living where we are,” Perrey said. “We’ve been found out. We can see that just with the amount of traffic on the road. Our little towns have become much busier than they’ve ever been before.”