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  • Rom’s August Real Estate Stats & Opinion

    Rom’s August Real Estate Stats & Opinion

    Okanagan Real Estate Report August 2021

    *click images to enlarge

    Rom’s Real Estate Opinion

    The phrase of the month for August 2021 for the Okanagan Real Estate market is “Levelling Off”. I hate to be a broken record but this is what was expected. The insane market of the last 2 quarters of 2020 and the first 2 quarters of 2021 could not sustain itself. The market had to correct either by a crash or a levelling off; and levelling off is what it has done.

    For the moment, it has stopped its minor correction and leveled off at a very strong market.

    Why did it not crash?

    That can be answered in 1 word: Inventory. (There isn’t any!) Low inventory will keep multiple offers coming and keep the prices rising. For the second month in a row the average price for the Central Okanagan is above $1,000,000. The demand from outside of the Okanagan continues to be strong which keeps the inventory low. Because the rental market is just as tight as the sales market, buyers have no alternative but to continue to push to buy in this market. I get a few calls per month from people who are desperately trying to find a place to live – buy or rent. For some reason they think I might have an “in” that other REALTORS don’t have. Of course the contrary is true.

    The average inventory in August 2021 is 267. The average inventory in August 2020 was 536. That is slightly less than half the inventory of 2020, which was already low. That says it all about what is going on.

    Conclusion

    If anyone ever asks you what is going to happen to the Real Estate Market in the Okanagan you can most definitely state that it is going to stay strong for the next year at least. That inventory has to go up dramatically before the market direction will change. That can’t happen overnight. This winter we will have our seasonal slow down which will make a better time to buy for BUYERS! As always, that is just the real estate world according to Rom.

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home. It can be done completely remotely if you prefer. It is totally free.

  • Rom’s July Real Estate Stats & Opinion

    Rom’s July Real Estate Stats & Opinion

    Okanagan Real Estate Report July 2021

    Rom’s Real Estate Opinion

    The market is progressing exactly in the direction that we anticipated. Things are settling down but definitely not crashing.

    Think of the market in the last year as something like a Chicken Little scenario from the 1943 Disney Movie. For the last 6 months the market has been running around with his hands waving in the air screaming and yelling that the sky is falling. In other words, the absorption was ridiculously high, the inventory was ridiculously low, monthly sales we’re breaking all historical records and price increases we’re breaking all historical records.

    What’s happening now is Chicken Little is settling down. The absorption in the Central Okanagan (Peachland to Lake Country) has now dropped to between 40 and 50%. The inventory is still very low and sales have dropped to a reasonable level. However, let’s keep this in perspective. Absorption between 40 and 50% is still off the charts for our area. A balanced Market is considered to be 12 to 18% depending on which expert you listen to. Below 12% indicates that you can expect price decreases and it is also considered a strong buyer’s market. Above 18% is considered a seller’s market and you can expect price increases with this level of absorption. 40% is a long way above 18%…

    Where is the market going to go from here and why?

    What has to change in order for prices and sales to drop dramatically? If we look at the inventory for July 2021 and compare this with inventory levels in July 2020 and 2019 then this July inventory level is less than half the other 2 year averages.  Although over time inventory levels will typically gradually increase as more houses will be built, more construction and development. However, in order for the market to change dramatically to even approach a balanced Market the inventory has to increase dramatically; likely more than double. Is this going to happen? This is the big question.  We will not get rid of multiple offers on the same property until that inventory increases. That is just basic logic. 

    Conclusion

    I think we will see this present direction of the inventory, absorption and sales start to level off at these relatively higher levels. The market has settled down from its Chicken Little level to its “normal” place in the regular cycle. 

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home. It can be done completely remotely if you prefer. It is totally free.  As always have to remember that’s just the Real Estate World according to Rom.

  • Rom’s April Real Estate Stats & Opinion

    Rom’s April Real Estate Stats & Opinion

    Okanagan Real Estate Report April 2021

    Rom’s Real Estate Opinion

    In the current whirlwind real estate market, we are hearing many stories emerging of how fast-paced and wild the home buying process has become. I wanted to share a story with you all today.

    Home Buyers Debacle

    A local realtor detailed an experience she had trying to find a home for her clients to purchase. Her buyer clients had lost out a few deals by being out bid. They finally found a home they were not going to be outdone on and they offered $100,000 over list price. They considered not putting in any conditions because their financing was a slam dunk at only 20% loan to value and they trusted what they saw in the house when they viewed it. However , they were advised by their mortgage broker to put a condition of financing in anyways.

    They did not get the deal. The were told the winning offer was $50,000 less than their offer but had no conditions. The sellers put more value on getting a firm decision than getting another $50,000. My Realtor said the buyers were angry and blaming the other side. However, this is like no fault insurance. The sellers are just taking the best offer for them in their minds. The seller’s Realtor is just looking after their client. The buyer’s Realtor was careful not to push them to go into a risky situation. The mortgage broker was being cautious and protecting the buyers. If anyone is to blame it would be the buyers because they did not choose to take the risk. How can anyone truly blame them for that?  This is one crazy market when we are actually discussing that putting a single condition on an offer and offering $100,000 over list price was too conservative. At the end of the day people have to calculate and be comfortable with their risks. Then they have to accept the consequences and move on.

    Kelowna Stats

    The Stats this month are off the charts, in the stratosphere, or any other similar metaphor I can come up with. This month Kelowna’s absorption is 88%. That means that 88% of all the houses on the market on April 1 sold in April. The average days on market to sell (DOM) was 23 days in Kelowna. What that means is that the listing was activated, an offer was negotiated and all conditions were removed in less than 23 days.

    Conclusion

    On top of all that there is not a shred of hard evidence indicating that this market is going away anytime soon. Those who believe the bubble is going to burst are simply speculating and guessing at this point. However, even a broken clock is right twice a day. Sooner or later things will change.

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home or it can be done completely remotely if you prefer. It is totally free.  As always, this is just the Real Estate World according to Rom.

  • Rom’s March Okanagan Real Estate Stats & Opinion

    Okanagan Real Estate Report March 2021

    Rom’s Real Estate Opinion

    Imagine in any given market, statistics were so off the charts that an experienced analyst says, “It must be a typo”. In March the absorption in the Central Okanagan was 99.76%! What does that mean? In March, virtually all houses that were on the market at the beginning of the month, were sold by the end of the month.  That is truly unbelievable.
    The average DOM (Days on Market to sell) in the Central Okanagan was 33 days. That is less than half of the 10 year average. The average sale price in March in Kelowna was $160,000 higher than the average sale price of the last 12 months. That does not mean prices have gone up that much. I had one Realtor tell me that he believes the market is rising $10,000 per month. There is no question, the Okanagan paradise we live in is no longer a secret.

    What does this all really mean to consumers and Realtors?

    People think we as Realtors must be having a heyday. In fact, I don’t think I have ever seen Realtors so frustrated. Almost all Realtors care deeply about their clients. They work hard to write offers that are legal and enforceable and with clauses to protect their clients, only to lose out to a higher bid over and over. Naturally, that is very frustrating for buyers and Realtors.
    One way to get an advantage for a buyer is to write an offer with no conditions on it. When the seller signs the offer the house is sold which gives that particular buyer an advantage over one with conditions. The problem is there are risks involved. A good Realtor will explain those risks in detail but at the end of the day buyers are looking for any way to create an advantage  for their offer. If you are a buyer in this crazy market be sure you understand the possible worst case scenarios if you make this type of offer. It does not mean that you should or should not make an offer like this. I personally have done it many times. It simply means you have to be informed, prepared and comfortable with the risks. Real Estate environments like this have been historically common in cities like Vancouver and Toronto but it is new here.

    Final Thoughts

    People are moving here in droves and there is no indication that this is going to let up any time soon. Our job is not to tell buyers what to do. It is to make sure they understand all their options, all the risks involved in those options and then take instructions from our clients. As a buyer you must move fast in this market to get the house you want. Pay attention to your Realtor, listen to their advice, make an informed decision and then act and act fast if you want to get a step up on all the other numerous buyers that are likely looking at the same property.

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home or it can be done completely remotely if you prefer. It is totally free.  As always, this is just the Real Estate World according to Rom.

  • Rom’s January Okanagan Real Estate Stats & Opinion

    Rom’s January Okanagan Real Estate Stats & Opinion

    Okanagan Real Estate Report January 2021

    Rom’s Real Estate Opinion

    The Okanagan Real Estate Market is continuing its robust, upward direction. Many houses are currently selling for above list price! All signs point toward another robust year.

    A question I hear a lot these days is, “Is now a good time to sell”? Absolutely it is! This is one of the few times in my 18 years in this business where sellers do NOT think their homes are worth more than they are. Most sellers are surprised by what they can get for their home.

    Recent Scenarios

    I just had a new listing that some Realtors commented was ‘overpriced’. However, I received a total of 4 offers in 48 hours and one offer was $30,000 over list price. These stories are not the exception; they are the norm in this market. Just recently, an original condition 1974 home with a lakeview in the Lower Mission, Kelowna area had 15 offers! It was listed for $650,000 and then sold for $110,000(!!) over list price at $760,000.

    If you are thinking of making a move in the next 5 years, now is probably the best time you will see to sell your home.  However, one has to be a little cautious. You have to remember that the reason prices are rising is the inventory of homes to buy is so low.

    Adding in Offer Subjects

    There are 2 ways to avoid being homeless when you sell your home. First, you can put in your offer: “Subject to the sale of your home”. This means that you put an offer on a house that will be conditional to you selling your home. The problem with this solution is that this is viewed as a fairly weak offer, especially in this market. The seller has to count on you, the buyer, to price his or her home correctly to sell before they know their home is sold. In this market there are likely offers without this stipulation which puts you in a poor negotiating position.

    The second way, in my opinion is the better way to solve this issue. As your Realtor, to protect your best interest, I will put the following clause on the contract: “Subject to the seller finding suitable accommodation on or before (Date). This condition is for the benefit of the seller”. What this means is the sale of your home does not go through unless you find a home to buy or rent and then remove this condition in writing. The reason I think this is a better option is it is an extreme seller’s market. A buyer has much more motivation to allow the seller to find a home than sellers have to allow the buyers to sell their home. You will likely be more successful with the later solution than the former one.

    Final Thoughts

    If you would like to find out what your home is really worth in a market like this give me a call or text me at 250-317-6405 and I would be happy to evaluate your home or it can be done completely remotely if you prefer. It is totally free.  As always, this is just the Real Estate World according to Rom.

  • Rom’s November Okanagan Real Estate Stats and Update

    Rom’s November Okanagan Real Estate Stats and Update

    Okanagan Real Estate Report November 2020

    Rom’s Real Estate Opinion

    The market rebound from a devastating Spring 2020 was surprising for everyone, including every Realtor® and top economists across this country. Since that time we have seen nothing but record breaking gains across the board, (other than Alberta which has been hit with the oil crisis). Sales are up, inventory is down, absorption is through the roof and prices continue to rise across the Central Okanagan.  The absorption rate for single family homes was over 57% in the month of November, breaking new records again.  This means that 57% of the total house inventory sold in one month.  Even in the boom of 2005-2008 we didn’t see these numbers.

    Canadian Real Estate Trends

    Let’s look at one of the trends that is arising from the global pandemic and allow me to make a prediction. There is no question that people are trending away from big cities in this country. Major Real Estate organizations are beginning to predict a slow down in Canada because of this trend. One of the things that is significantly different between the stock market and the Real Estate Market is that the Real Estate market is incredibly local. Very often 2 markets separated by a relatively short distance can be experiencing completely different markets.  To look at “Canadian Real Estate” stats and make decisions locally based on them is not an effective methodology.

    The 2 largest economies in Canada are Vancouver and Toronto. To give you an idea of how large the Real Estate markets are in these cities consider this. There are approximately 110,000 Realtors in Canada. 62% of them work in Toronto and Vancouver. That means that when a report talks of Canadian Real Estate they are primarily talking about Real Estate in Toronto and Vancouver.

    So let’s get back to our trends. If consumers are moving from the cores of the 2 major cities in this country the reports on Canadian Real Estate will be that sales in Canada are dropping. However, the fringe communities will likely benefit from that trend. The outlying suburbs of Toronto, Vancouver, Montreal and Ottawa are already reporting an increase in sales. Here is the kicker: the Okanagan is an outlying area of Vancouver.  That may seem strange being it is 4 hours from Vancouver. However, an increased number of people in Vancouver are opting out of city life and coming to the Okanagan.

    Final Thoughts

    My prediction is that as long as the government does not shut down the country, in 2021 you will see news reports that the Canadian Real Estate market is beginning to soften. However, our stats in the Okanagan will remain strong as migration from Lower Mainland and Alberta continues. As always, this is just the Real Estate World according to Rom.

    Wishing you and your family a wonderful, safe and healthy Christmas and Holiday Season.
  • Rom’s October Okanagan Real Estate Stats and Update

    Rom’s October Okanagan Real Estate Stats and Update

    Kelowna Real Estate Report October 2020

     

    Rom’s Monthly Real Estate Opinion

    Brrr… we got our first glimpse of winter this past month here in the beautiful Okanagan. Even with our first snow fall, the real estate market has not gone into hibernation.

    If we didn’t know better we would have to conclude that the best thing to happen to the Real Estate market across this country is a global pandemic.  In October the absorption rate for Central Okanagan was at 53%. What that means is that in the Central Okanagan 53% of the entire residential inventory was sold in October. These are figures usually reserved for Toronto and Vancouver when they are booming. To give you another perspective, a balanced market is considered somewhere around 12 to 18%. This gives you an idea of how much of a seller’s market this is.
    This market will start to slow down as we get into November and December because of the winter weather and the holidays. It slows down every year at this time. It’s in extreme markets like this that REALTORS show their value. It takes a well trained REALTOR to figure out what a house is worth in a market like this but also how to write an offer in a market like this and actually get the house for their buyer.

    Where are buyers coming from?

    Where our buyers are coming from is changing. We are seeing an increase in buyers from Alberta, from the Coast and from other areas of the world. The Okanagan is no longer a secret.  I believe we will see a dramatic increase in buyers from major cities like Vancouver, Edmonton, Calgary and Toronto into the Okanagan region. Right now that is just a prediction but soon we will have the data to reveal the reality.
    As always, please remember this is just the Real Estate World according to Rom. Get out and enjoy the beauty of late Fall in Kelowna!
  • Rom’s September Okanagan Real Estate Stats and Update

    Rom’s September Okanagan Real Estate Stats and Update

     

     

    Central Okanagan

    “Unusual market activity seems to be the theme this year, although not surprising considering there is nothing normal about 2020.  The pandemic has definitely made people look at things differently.  We are seeing higher demand likely due to post-quarantine lifestyle changes.
    The Pandemic lifestyle changes (who doesn’t want to live in the Okanagan), still record low mortgage rates, very low listing inventory and a continuing migration of buyers from the Lower Mainland are driving up prices from in particular single family homes to record highs.  The Albertan buyers were only making up 7% last month, likely due to the effects of the Pandemic to the oil and gas industry.  The Benchmark home price (better representation than average or median house prices) was $710,700, up 6.3% from September 2019!  It is also remarkable that the sales activity in the one million and up range tripled this year.
    It is interesting to note that the largest type of Buyers are couples without children (29%) last month, followed by couples with children (24%), see graphic. This led me to believe that more semi-retired and retired couples aremoving and purchasing in the Kelowna area.  Overall, 41% of all the buyers were out of town buyers!  Also noticeable is the large amount of first time home buyers last month, 24% of all the buyers.
    The average number of days to sell a home, always a good barometer to watch, barely nudged over August’s 89 days, coming in at 90 days.

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    BC Overall market

    The British Columbia Real Estate Association (BCREA) reports that a total of 11,368 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in September 2020, an increase of 63.3 percent from September 2019. The average MLS® residential price in BC set a monthly record of $803,210, a 15.3 percent increase from $696,647 recorded the previous year. Total sales dollar volume in August was $9.1 billion, an 88.3 per cent increase over 2019.
    chart

    “The provincial housing market had a record-setting September,” said BCREA Chief Economist Brendon Ogmundson. “Both total sales and average prices were the highest ever for the month of September as pent-up demand from the spring pushes into the fall.”

    “Average prices are skewing higher as demand for space during the pandemic drives sales of single-detached homes,” added Ogmundson. Total provincial active listings are still down about 12 per cent year-over-year, with some markets even more under-supplied as the pandemic continues to keep listings low.  Year-to-date, BC residential sales dollar volume was up 25.1 per cent to $49.7 billion, compared with the same period in 2019. Residential unit sales were up 12.5 per cent to 65,023 units, while the average MLS® residential price was up 11.2 per cent to $764,298.

    As always, this is just the Real Estate World according to Rom.
  • Rom’s Real Estate Opinion & Stats June 2020

    Rom’s Real Estate Opinion & Stats June 2020

    Kelowna Real Estate Report June 2020

    Rom’s Monthly Real Estate Opinion

    Below you will find the ‘benchmark’ prices for properties. This provides us with a much better idea of the current market rather than using ‘average’ or ‘median’ prices.  ALL property prices (Condo’s, Townhomes and Single Family), went UP compared to June 2019.  
    Despite the Pandemic, the real estate market is active and properties are selling. Moreover, the market has bounced back to an astounding level. It is right back to where we thought it would get to before COVID-19 hit. There is no algorithm for the effects of COVID-19 on the Okanagan Real Estate market. World renowned economists really don’t have any idea either. 
    In Kelowna, the absorption rate for June was 24.39%. This means that 24.39% of all residential inventory in the Central Okanagan sold in June!  It hasn’t been that high since April 2018. There were 261 residential sales in June in the Central Okanagan. That is the highest number of sales since July 2017.

    So, what is going on?

    How can the market be flourishing when unemployment has shot up and the GDP has shot down? There are 2 factors creating this.
    First, banks and governments have stepped up hugely. The pandemic did take eligible buyers out of the market. However, every time the interest rates dropped another fraction of a percentage point, multiple new buyers were now able to buy. Remember, the market is driven by the buyers. There was also a backlog of buyers who were ready to purchase but were waiting out the Pandemic.  Since we entered phase 3 here in BC, consumer confidence returned and therefore real estate activity spiked.
    Second, the market and the economy are not doing well in Alberta. Edmonton seems to be doing slightly better than Calgary but they are both hurting because of COVID-19 effects and the bust of the petro-chemical industry. This is driving some to pull that retirement trigger earlier than previously planned and move to the Okanagan. 
    Please remember this is just the world according to Rom.
  • Rom’s Monthly Real Estate Update May 2020

    Rom’s Monthly Real Estate Update May 2020

    May 2020 Kelowna Real Estate Report

    Yearly Comparisons – Sales and Prices for May 2019 vs May 2020

    *Please click on images below to enlarge