September 2008 real estate stats released from VIREB

- See the latest Nanaimo sales statistics here-

The USA financial meltdown, will it effect British Columbians?

I would first preface my comments by saying I really don't know what will happen in the future as I am not a fortune teller. I think that is one reason the stock market has so much turbulence in it, there is allot of uncertainty in the market right now. The U.S. meltdown led to heavy losses for investors in U.S. mortgages, including banks. The U.S. government put together a rescue plan that could cost as much as 1 Trillion dollars. The announcement of 2 of the largest banks going under was quite a shock to many. Lehman Brothers filed for bankruptcy and Merrill Lynch was sold for $50 million to avoid a collapse. I do not think the sky is falling in Canada and I am still very optimistic however these are troubing times for stock investors.

The Dow Jones dropped 777 points to close at 10365 this was a 7% drop, the largest point drop in it's history.

The USA has one major difference to Canada and that is our sub prime mortgage market is a very small portion of the total market. British Columbia has the lowest foreclosure rates in Canada and it has one of the lowest unemployment rates in the last 30 years.

There has been a dramatic slow down in real estate sales in Nanaimo more than the usual seasonal slow down. There is however many reasons to believe that it is a temporary reaction the the uncertainty in the financial markets. Nanaimo I believe has all the healthy signs of a stable real estate market. Here are 10 reasons why I think Nanaimo will continue to do well. It may be naive to still feel that real estate will continue to be stable but then again where else would you want to put your money? People need to live somewhere and that is not going to change any time soon.

1. Money is coming in from all over; people want to live here!. The Canadian finance minister ( Jim Flaherty) said Canada will avoid a recession and will be back on track by 2010. One of the few G 8 countries to do so.
2. We have a more diverse economy than ever and two of the largest employers are the government.
3. Our University is bringing in students from all over the world.
4. We have a new cruise ship terminal and expanded airport.
5. When you see Starbucks and Chapters and Home Depots opening, they have done extensive market analysis.
6. Baby boomers that worked hard all there life and inherited well from a generation of savers have the desire to live on the coast and do not need jobs to move here. In many cases they can rent out their existing homes.
7. Have you tried to hire an electrician or plumber lately? These services make you wait a week, show up late and are still run off there feet.
8. The average home in Nanaimo is around $360,000 versus $600,000 + in Vancouver. This is still very reasonable by any measure.
9. Vacancy rates in Nanaimo's rental market are at almost 2 percent, supply and demand in action.
10. We have one of the most moderate climates in Canada.