RomRealty

Tag: affordable homes in Kelowna

  • Rom’s Jan 2023 Real Estate Opinion

    Rom’s Jan 2023 Real Estate Opinion

    Okanagan Market Prediction

    It’s a new year!

    I hope your 2023 has started off on a positive note! The big real estate stories for January 2023 are the absorption rate and the number of sales.

    Absorption Rate

    The absorption rate is down for the Central Okanagan zone encompassing Kelowna and surrounding areas. It is down to 9.01%. This is 3% below the important limit of 12%. Traditionally below 12% we will see downward pressure on prices.

    Number of Sales

    The other important statistic to note is the number of sales. Sales are down approximately 50%.  What this says is the demand has decreased dramatically. This decrease in demand for housing is a direct result of the rise in interest rates. As interest rates rise fewer and fewer and people can afford to buy a house.

    There is a silver lining in this cloud

    For the last few years sellers have been dictating to buyers what their house is going to sell for. Now buyers have a choice. The market has shifted to a more balanced market and in some places a buyer’s market. Sellers have had to get aggressive in their pricing in order to compete with other sellers. Sellers who refuse to accept that the price of their house has come down in the last few months, are sitting on the market with no offers. This trend is a good thing for buyers. They have more inventory to look at and can bargain more aggressively.

    Interest Rates

    On January 25th the Bank of Canada overnight lending rate was increased by 1/4 of a percentage point (25 Basis Points). This sent a message that the bank is softening its aggressive attack on inflation. The next interest rate announcement is on March 8th. I believe we will see a similar 25 basis point increase.  The bank desperately wants to slow the economy and bring down the inflation rate. However, if they keep an aggressive direction, it will increase mortgage defaults and foreclosures and that is not good for anyone.

    However, you always have to remember, that is just the real estate world according to Rom.

    Please remember, I am NEVER too busy for any of your referrals!

  • Kelowna Real Estate Market Stats March 2019

    Kelowna Real Estate Market Stats March 2019

    House Prices and Sales Activity in Kelowna in the Rebound

    We are seeing that sales and house prices have started to rebound. In March, 2019 the median house price was $648,250 up from $619,000 in February, 2019. Sales and absorption for the Central Okanagan have normalized and I suspect this will continue to do so for the rest of the year. If you are unsure what this means, the absorption rate is the amount of sales at a given time and with a given listing inventory. However, make no mistake, the Okanagan real estate market is definitely softening and sales activity is still lower than March of last year. Buyers have more inventory to look at and sellers are going to have to get more aggressive with their pricing to reach a sale.

    We are now at a balanced market with prices creeping down, however, I expect house prices to stabilize and maybe slightly go up again by mid year. Keep in mind that we experienced a huge price increase from March 2018 to July 2018, when Okanagan house prices were at its highest ever! A price correction was inevitable. Unfortunately all tax assessed values of properties are currently based on that record July month. As a result, some sellers may think that their house is worth more than true market value. Often sellers in a market like this do what we call, “chasing the market down”. They resist price reductions until it’s too late. When they finally do drop their price (out of frustration), they are actually still above market value.

    A cardinal rule in the Real Estate business is that if a property has been marketed “reasonably well” and “priced well” for 30 days or more, without any serious activity or sale, it is overpriced for that market… but that is just the Real Estate World according to Rom.

    *Click on the images for larger view