Tag: financing

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.

December 17, 2020
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.

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.

“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.

October 16, 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.

July 15, 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

June 17, 2020
Kelowna condos – Now a good time to buy or sell?

Is it now a good time to buy or sell your condo?

These have been challenging times for all of us and some of the real estate market sectors have been and will be hit harder than others.

I am expecting the condo market to take quite a hit; maybe not right away but over the next few months. When comparing the condo market from April & May 2019 to April & May 2020, the Median Condo prices are already down by 7%.

I feel that these are the main contributors to this happening:

1. Market saturation of new condo’s, especially in the downtown core of Kelowna

2. New tightening rules of CMHC that will be in effect as of July 1, 2020. This will make it more difficult for (first time) home buyers to qualify for financing

3. Mentality shifts as a result of the COVID-19 pandemic. Buyers prefer to live in a single family home with their own yard rather than dealing with elevators and small living spaces.

Therefore, I expect that the demand for 1/2 duplexes, townhomes and single family homes will increase. However, I don’t think the market of condo’s under the $425,000 price mark will be touched by this. This is simply because at that price point there is no alternative to a condo.

Please remember that this is just the real estate world according to Rom.

Have a real estate question? You can contact me anytime by text, phone or email. I would love to have a chat with you to discuss the market or your buying/selling plans. I look forward to hearing from you!

June 15, 2020
Rom’s Real Estate Opinion April 2020 during COVID-19

The Real Estate Market During the COVID-19 Pandemic

There is no doubt that the COVID-19 pandemic has made a big impact in the lives of everyone around the world. The way we live our day to day lives has changed drastically; from how we get our groceries to being able to see our family and friends. The real estate market is no different. However, people still have the need to buy and sell homes, even during these challenging times.

I want to start off by sharing a few visuals. Please click the images to englarge them. The first is Country by Country COVID-19 cases. I want to point out how well BC is doing on flattening the curve, even when comparing to the rest of Canada.

Next I want to share some graphics on home sales and home prices in past recessions. In April, single family homes were actually still up by 4% compared to April 2019. Factor in low rates that we likely wont see again, it is actually a great time to purchase a home.

Jean-Francois Perrault, SVP & Chief Economist of Scotiabank stated the following, “We view the housing market to be on a COVID-related pause. Following a dramatic slowing in Canadian housing markets in 2020Q2, we anticipate a quick rebound in home sales and housing starts through 2021 if population growth remains strong, and the economy improves in the second half of the year”.

April 2020 Okanagan Real Estate Report

In real estate, we track 5 stats that are the best indicators of what’s going on in the residential market. Those stats are sales, DOM (days on market to sell), inventory, absorption (% of inventory that sells each month), and prices.

Sales and absorption are the first stats to change. They are both down 50-60% compared to April 2019. This is normally the time the market would be ramping up for spring.

The stats also illustrate a significant factor that we discovered years ago about how a market goes through its changes. This is that the prices are always the last stat to change. April’s statistics show exactly this. Prices have essentially not changed.

If we look back to the recession of 2008, sales and absorption began to drop right in the first quarter. However, prices remained stable and/or continued to rise. We are seeing the same right now with house prices actually up 4%, yet condo prices are down 4%. I expect the prices of condos to lower further this year. House prices may lower as well but not as much as condos will.

Conclusion

Although the last stat to be typically affected by a recession/pandemic is the price, it may have a short term effect on lower house prices. Although, we haven’t see this happen yet.

We will soon come to know our new ‘normal’. Businesses will reopen, consumers will regain their confidence and the real estate market will rebound. This could be as early as this Fall.

However, I do believe that condo prices in the Kelowna area will continue to dip due to ample new construction.

As always, this is just the Real Estate World According to Rom.

May 17, 2020
Buying and Selling Real Estate During the Coronavirus Pandemic

Buying and Selling Homes during the Coronavirus Pandemic

Even during this difficult time, I want to let you know that my obligation to help you sell or buy a home is still in force.

The Government of British Columbia has released it’s list of Essential Services. Real Estate services have been listed as essential.

While following the guidelines set out by the government, I will continue to support my clients who are in the need to sell or purchase a home. Homes are still selling, albeit there is less activity.

So, how do you buy and sell real estate in the coronavirus era?

There are many factors to consider while trying to buy or sell while also maintaining social distancing. Open houses are unfortunately not advisable during this time.

Virtual tours offer an in depth look inside a home and its floorplan. Touring a home virtually allows clients to see if a home makes sense to them.

Another option available is if the home for sale is vacant. In fact, I have two vacant properties on the market currently (click the addresses listed below for more information on these listings)!

968 Fuller Ave, Kelowna, BC

205-1125 Bernard Ave, Kelowna, BC

While showing vacant properties, I ensure that inside is sanitized, touch nothing and maintain distance from clients as they walk through.

Upon making or accepting an offer, handshakes may not be feasible but teleconferencing and e-signing programs allow things to flow digitally.

Realtors have checklists for buyers and sellers to ensure that properties are able to be viewed safely. If you have any questions, please feel free to contact me to discuss further.

Stay safe and healthy – Rom.

April 7, 2020
KELOWNA CONDO CLOSE TO DOWNTOWN!

FOR SALE: 205-1125 BERNARD AVE, KELOWNA, BC$289,800

PRICE REDUCED!

Spacious and inviting one bedroom, two bathroom condo close to downtown Kelowna. This large condo features 9’ ceilings and an open floor plan kitchen, dining and living space complete with nice laminate flooring and a cozy fireplace. Just off the living room is a large outdoor deck with excellent privacy. The master bedroom features brand new carpet and its own ensuite bathroom.

Along with another full bathroom, this condo comes with a laundry room that is spacious enough to use as storage. Also included is a separate locker room for storage and secured underground parking with security cameras. There are no rental restrictions and one pet (under 20lbs) is allowed. Excellent location with shopping and a bus stop only steps away.

For more details, please contact Rom Houtstra at 250-317-6405 or email him at rom@romrealty.com.

February 25, 2020
Rom’s Kelowna Real Estate Opinion January 2020
Kelowna Real Estate Opinion for Jan 2020

We are well into the swing of things for 2020. I hope you are continuing on with any resolutions and visions you set for yourself for 2020! It’s never too late to get back on track. For this months opinion, I will start off with a couple of real estate definitions:
- Market Correction: A downward trend with prices, absorption and sales reducing, and inventory and DOM (days on market to sell) increasing
- Market Recovery: An upward trend with prices, absorption and sales increasing, and inventory and DOM (days on market to sell) decreasing
One of the important differences when comparing the Real Estate Market to the Stock Market is that the Stock Market is global and the Real Estate Market is local. The old phrase, “location, location, location” is not only important in real estate. It causes a lot of misunderstandings with ‘experts’ who try to predict the Real Estate Market (including a lot of realtors). The press will grab onto anything that looks radical in the market. Then they report without a lot of reference to the relevance of the information or the differences in the various locations. The problem is that the public gobbles up whatever the press feeds them. This problem is relevant in the Real Estate statistics in the Okanagan right now.

Current Okanagan Situation

Currently, when we look at the statistics, the Okanagan is in recovery mode. Around the third quarter of 2019, it started to shift from a slight correction to a slight recovery. Here in the Central Okanagan, there was a bit of a lag for the last couple of years. We have a larger economy than some surrounding markets. Therefore, it was building up rebound pressure. We are now seeing a positive market bounce back! It will be interesting to watch as we proceed through 2020 if this trend continues. I expect big markets like Vancouver and Toronto will continue to recover. This means for the Okanagan that we will be in a very gradual recovery trend for the next couple years.

As always, this is just the Real Estate World according to Rom.
February 17, 2020
Rom’s Kelowna Real Estate Opinion November 2019

November 2019 Kelowna Real Estate Report:

*Click the images to enlarge

Kelowna Real Estate Opinion for Nov 2019

We are well into December now and I love to take the time at the end of the year to reflect on the past 12 months. Each year I make predictions about the market for the coming year and I will do that here today for 2020.

Last December, I predicted a flat market, relatively ‘boring’ with no dramatic rise or fall in any statistic. I called it a soft correction which means it’s a little on the downside but mostly flat. This is exactly what we got in 2019.

Overall, prices inched down a bit here in the Central Okanagan. I also predicted that inventory would rise slightly, which it did (about 5-10%). Sales were predicted to be flat as well. The absorption rate (% of total residential inventory that sells on a monthly basis), decreased slightly.

As you can see, for 2019 overall it has been a very flat market. You can view the 12 month comparison of Nov 2018 to Nov 2019 by clicking here: 12 Month Comparison November 2019 (1).

So, what will happen in 2020?

Basically, we will see more of the same with one slight change. The forces driving the market are charging slightly. There is some uncertainty in the US government, Canadian government and the BC government that is keeping consumer confidence down.

However, banks are counteracting that negativity. Interest rates are historically low again. The new first time home buyer program (see my blog post here), that rolled out in September is being used aggressively. Big cities like Toronto and Vancouver have gone into the recovery leg of their cycle. We are still influenced by the increased buyer activity from the failing Alberta market and people cashing in from the West Coast.

In summary, we will see a relatively flat market for 2020. Instead of calling it a soft correction, I will say it will be a soft recovery. Prices, absorption and sales will rise slightly and inventory will remain constant. It will be a good market but nothing spectacular. That is the Real Estate World according to Rom.

Wishing you and your family a safe and happy holiday season!

December 17, 2019