I would like to put forward the following points:
1. "Nearby" can never be a preposition.
2. "Nearby" may be an adjective. He lives in a nearby house.
3. "Nearby" may be an adverb. He lives nearby.
4. His house is near mine. "Near" is used as a preposition.
5. He wants to live somewhere near. "Near" is used as an adverb.
6.. He found a large house in the near distance. "Near" is used as an adjective.