The real estate market in Port Alberni, and across Vancouver Island, is hot. That probably comes at no surprise to anybody at this point in time. Put another way, we are in the strongest Sellers Market in the past 20 years, and probably in the history of the Alberni Valley.
What is a Seller’s Market?
A Seller’s Market is characterized by a lot of demand for houses, while at the same time a shortage of supply. Right now, we have a huge demand for houses in the Port Alberni Market, and at the same time fewer and fewer people are putting their houses up for sale, despite it being a great time to sell.
Where are the Buyer’s Coming From?
This is probably the most common question that real estate agents get asked. To answer the question accurately, the Realtors of Royal LePage Port Alberni – Pacific Rim Realty recently did a survey of every person who bought real estate through the brokerage in 2020. The results were interesting to say the least: 38% of buyers were local to the Alberni Valley area; 31% were coming from communities on Vancouver Island outside the Alberni Valley; 21% were coming from British Columbia, outside Vancouver Island; 9% were coming from other Canadian provinces; and 1% bought from the United States.
The most surprising part about the results were that 69% of Buyers were from Vancouver Island. An idea had been floating around that the pandemic had caused buyers to flock to Port Alberni from the lower mainland, and that is not the case. Albertan and American buyers, who have historically played a big role in the Vancouver Island market, are essentially a nonfactor in todays hot market.
Who is Buying?
If it’s not the lower mainland driving this strong Seller’s Market, then who is driving it? This is where it get’s really interesting. It’s the Millennial generation! For the first time in the history of the Alberni Valley, the Millennial generation is affecting the real estate market in Port Alberni. The same survey of Royal LePage Port Alberni – Pacific Rim Realty Realtors showed that 39% of real estate purchased through the brokerage in 2020, was purchased by first time home buyers! That is quite frankly, astonishing.
48% of real estate purchased was bought by people buying a home (who were not first-time home buyers). Only 13% of purchases were bought as investment property. That dispelled another myth that had been circulating, namely that investment speculation was driving the market.
Why are Millennials Buying in Such Large Numbers?
The Royal LePage Port Alberni – Pacific Rim Realty survey did not shed any light on this. However, one theory is that it’s fear driven. Remember this time last year when everyone was buying up all the toilet paper in fear of a shortage due to the pandemic? Well, it might be a little like that.
When the original Covid-19 lockdown was lifted back in 2020, there was expectations that a lot of new listing would flood the real estate market. As it turned out that didn’t happen for a number of reasons, the most obvious being many people who would have otherwise listed their house for sale that year, decided they didn’t want strangers waking through their homes during a pandemic. The result was a significant shortage of listings coming on the market, while demand remained relatively strong. Next came another potential reason why people held off on listing their homes for sale; the fear that if their home sold, the homeowner would not be able to find a house to buy. This likely compounded the lack of supply, pushing the Alberni Valley into an even stronger Seller’s Market.
Back to the Millennials. Housing prices began to skyrocket in a never before seen way. Young people, who had always planned to become homeowners some time down the road, started to become afraid that they may get priced out of homeownership forever, so they jumped into the market for the first time. Now a market facing a historic shortage in real estate for sale, began to see a massive demand for housing. The perfect storm for a Seller’s Market.
But, I thought the Baby Boomers were Supposed to Drive the Market?
Remember the predictions circulating for the past twenty years that the Baby Boomer generation would drive the Vancouver Island market? Well, they have been, for twenty years. And here’s the thing, they probably still are today. There is a very strong possibility that a large number of the first-time home buyers’ are getting at least some of their down payments from Mom and Dad.
What Does the Future Hold?
That’s the million-dollar question isn’t it. We at Royal LePage Port Alberni – Pacific Rim Realty aren’t qualified to answer that question. And given that nobody saw any of this coming, we’re not sure anyone is. With that said, let’s use some simple logic. All economic markets have fluctuations - ups and downs. When you add emotion into a market, it can become even more unpredictable. It stands to reason that at some point this market will change. Will it be next month? Next year? Next decade? That’s unknowable, and it’s up to you to look at the state of the real estate market and make your best prediction.
Is it a Good Time to Sell?
By definition a Seller’s Market means it’s a good time to sell. The question really is, will it be a better time to sell at some later date? That too is unknowable, and up to you to decide for yourself. All we can say are the facts: prices are at an all time high, and we are in a strong Seller’s Market.
If you are thinking about selling your home, but you are afraid to because you are unsure if you’ll be able to find a suitable home to buy, then we have to suggest setting up an appointment for a consultation with a real estate professional. Real estate agents in the Alberni Valley have been adapting to this new market, and there are several unique solutions to help keep you safe in this scenario. It is not a one sized fits all solution, so it’s important to get trust worthy advice to help you navigate this market.
Two things are for sure, these are interesting times to be alive, and Vancouver Island Millennials are making their mark on the Port Alberni real estate market.