A Balanced Market
As predicted, the market has leveled off into a balanced market right across the board. The spring market has started fairly early this year and our sales are up moderately compared to last year throughout the Interior of British Columbia.
The best way to determine whether a market is in a balanced range is to check the absorption. The absorption is the percentage of total residential inventory that sells on a monthly basis. If there are 1000 houses on the market on February 1st and 200 of them sell in February then the absorption for February is 20%. Absorption between 12 and 20% is considered a balanced market. Almost all of the interior of BC is within that range. The absorption is a direct indicator of supply and demand. That’s why it is so important in predicting the immediate future of the real estate market in any given area.
Inventory Rising
It’s also important to know that even though it is still historically low, housing inventory is rising throughout the interior. This could be an indicator that the multiple construction sites that are coming online are starting to hit the market. However, it is also important to remember that the inventory always goes up in the spring. Overall, we anticipate a fairly balanced market throughout the year. Prices are expected to rise 3 to 5 %. There will be no significant ups or downs. Some people would call this boring. However, it is actually the ideal market. Call it slow healthy growth. A boom is never sustainable.
As the interest rates hopefully inch down this may do something to bolster the market a bit. But rest assured if inflation starts to rise again the Feds will undoubtedly increase interest rates to push it back down. Current projections are that interest rates will come down from .5% to 1.5% in 2024.
As always, this is just the real estate world according to Rom. Contact me today for all of your real estate needs!
