Okanagan Market Prediction
The Year 2022
2022 was a whirlwind of a year. In the first quarter of 2022 our prices rose, our absorption was through the roof and sales were record highs.
After that it’s been mostly downhill. By the second quarter of 2022, prices dropped an average of 10 to 15%. Then they levelled off. Prices have remained relatively constant since the end of the second quarter.
December
Absorption dropped dramatically in December. However, if you look back historically December absorption generally has a fairly dramatic drop from November. This is simply because half of the month is spent around vacation, holidays and family.
What’s ahead in 2023?
It will be interesting to see what happens in the first quarter of 2023. I believe there will be some downward pressure on prices in 2023. This will be caused by a continued increase in the interest rate.
The next announcement for the Bank of Canada is on January 25th. My guess is that it will either be raised 1/4 or 1/2 of a percentage point. These two possibilities will have very different results to the buying consumers across Canada.
A quarter of a percentage point will show that the Bank of Canada is softening their approach on interest rates. A half of a percentage point will show the consumers in Canada that they are definitely not finished yet. If interest rates go up another half a point at the end of January we will see continued softening in sales and prices.
“After a very strong first half of 2022, we began to see market activity moderate amid consistently rising interest rates imposed by the Bank of Canada,” says the Association of Interior REALTORS® President Lyndi Cruickshank, adding that “although inventory levels remain tight, the high interest rates will continue to subdue market activity in the coming months.”
However, you always have to remember, that is just the real estate world according to Rom.
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