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  • Rom’s Real Estate Market Opinion – Feb 2024

    Rom’s Real Estate Market Opinion – Feb 2024

    The Real estate market in January of 2024 is sending us mixed messages.

    The stats for January indicate that the market is actually down in the Central Okanagan. The absorption in the Central Okanagan is below 10% for the second month in a row. If you look at these statistics you would say that the market is still correcting.

    However, I know that is not true from what other Realtor colleagues have been telling me. Every Realtor I know has been saying that the year started out strong or at least increasing from 2023.

    We have to remember that our stats are always 2 weeks to a month behind reality. When a Realtor writes a deal, the deal is not recorded as sold until the conditions are removed – which means the statistics could be outdated by up to a month.  You will likely see the absorption rise in February.

    We expect prices to rise in 2024 and we expect a fairly strong year. You can see, when we take a closer look at the MLS system, that even though the absorption is down for the month, sales increased in the last half of the month.

    In summary, in the next few months you will see an increase in sales, prices and absorption and a decrease in days on market to sell. This is called a recovering market. The spring market will create some of that upward pressure but as we compare month over month you will see that is increasing as well.

    As always, this is just the real estate world according to Rom. Contact me today for all of your real estate needs!

  • The Real Estate Market According to Rom – November

    The Real Estate Market According to Rom – November

    The real estate market in the interior of British Columbia is starting to show signs that things may be leveling off some. Below is a graph of the Bank of Canada overnight lending interest rate announcements since it was .25% in April of 2022.  The last two interest rate announcements from the Bank of Canada have been holding steady at 5% for their overnight lending rate. Inflation dropped on October 17 from 4% to 3.8%. This is what the bank wants to see. The Canadian Real Estate, and Mortgage Market are watching this closely.  It seems that the rate hikes are starting to level off.  Please see the rate predictions below

    The Bank of Canada, along with the government need to put pressure on inflation by raising the interest rate to push consumers from purchasing, but if they are aggressive for too long of a period it’s going to create a much bigger problem for us in the future.The next Bank of Canada announcement is December 6th. If they hold steady at 5%,which In my opinion I believe they will, that will bring us a balanced market in 2024.

    I am estimating that we can call the market “back to the norm.” What we experienced in the years prior to Covid. A reasonably active Spring 2024, with a slight downturn in the summer months, and then a moderate increase in the fall.

    Things are looking up for 2024, and as always, this is just the real estate world according to Rom. I hope you enjoy the rest of your November.

  • Rom’s June 2023 Real Estate Market Opinion

    Rom’s June 2023 Real Estate Market Opinion

    Okanagan Market Prediction

    Okanagan Real Estate Market

    I hope you are having a fantastic summer and staying cool in this heat!

    The real estate market in the Kelowna area is remaining strong and steady. Average absorption is rising and in some areas of the Okanagan, has passed the 30% mark.

    That tells us that the market will remain strong throughout at least the rest of this year unless the government decides to put up interest rates aggressively. Sales have caught up from the downturn starting in the second quarter of 2022 and extending to the first quarter of 2023. We have now surpassed the sales numbers of last year month over month.

    Home Price Index

    Hot topic: Interest Rates

    On July 12, 2023, the Bank of Canada hiked another 0.25%, bringing the rate that sets all rates to 5.0% and bank prime rates to 7.20%. We haven’t seen the policy rate start with the number 5 since 2001.

    For variable-rate mortgages, monthly payments will go up by about $15 for every $100K of mortgage balance. Stay tuned for the next rate decision on September 6.

    As always, this is just the real estate world according to Rom. I hope you are having an amazing summer!

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

  • Rom’s Feb 2023 Real Estate Opinion

    Rom’s Feb 2023 Real Estate Opinion

    Okanagan Market Prediction

    Light at the end of the tunnel

    As we predicted last month, we see some fairly positive light at the end of the tunnel in the real estate market in the interior of British Columbia. This light is coming from 2 directions.

    Generally, the spring market in real estate starts when the weather breaks. The weather started to break in the last week of February. Open houses are getting busier with more and more people out looking at houses.

    Secondly, the Bank of Canada decided to hold interest rates steady. This is the first time the overnight lending rate has not risen since February of 2022. Most of the consumer interest rates are based on the overnight lending rate.

    Record high inflation is beginning to come down with Real Estate prices leading the way. Fuel and grocery prices are expected to inch down in 2023 as well.

    Sales are up!

    Real Estate sales in the Okanagan in February, although down from February of 2022, have increased substantially from January of 2023. The absorption figures, which is the best statistic to use when trying to predict the future of the local markets, has increased moderately in all three zones as well.

    Not so fast…

    I cannot say at this point that the downward trend is over. The market always rises in the spring. However, I can say that combined with the interest rates, the spring market seems to be opening up fairly early and we should have a fairly active spring market in the Okanagan.

    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!

  • 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!

  • Tax Fighter Guide for HomeOwners

    Tax Fighter Guide for HomeOwners

    Tax Fighter Guide for the Homeowner

    Here is your guide to appealing your property assessment notice. Pay your fair share of property taxes and not a penny more! Click the TaxFighter link below:

    TaxFighterPDF

  • Rom’s August 2022 Real Estate Opinion

    Rom’s August 2022 Real Estate Opinion

    Okanagan Market Prediction

    Whether the market direction is changing from down to up or up to down, trying to predict the immediate future of the market is like trying to hang glide with a frisbee. There is just not enough new data yet.

    Going Up

    The absorption in the Central Okanagan went from 11% in July to 15 % in August. Sales are up as well. As I mentioned last month the statistics in the market look much worse because of how they compare to the first quarter of 2022.

    There are lots of periods in the last 25 years where low double digit absorption or in some cases even single digit absorption was the norm. Prices as well have come down since the first quarter of 2022 and seem to be leveling off a bit.

    Interest Rates

    On September 7th the Bank of Canada raised the overnight lending rate by .75%. That sends us a message that they are not finished with their interest rate increases to reduce inflation. The mortgage rates are already following. With each increase a small sliver of the population can no longer buy at all or can no longer buy the type of house they want to buy.

    I hate to sound like a broken record but if they continue to push those interest rates up the downward pressure on prices and sales will continue proportionally. I believe that we will actually see a bit of an increase in absorption and sales activity when we do the statistics for September. Kids are back in school, parents have a little more time to house shop and traditionally we see a little bump in early fall.

    As always, this is just the real estate world according to Rom. If you have any real estate questions give me a call or send me an email at any time.

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

  • Rom’s July 2022 Real Estate Opinion

    Rom’s July 2022 Real Estate Opinion

    Okanagan Market Prediction

    The Real Estate market in the Okanagan is going through the predicted correction of the last couple of months.

    The big story this month is the market changes in the Kelowna area. Absorption has dropped to 11%. In general, a consistent absorption above 20% will create upward pressure on prices. A consistent absorption below 12% will create downward pressure on prices. That is exactly what we are seeing.

    Prices Changes

    The prices in the Central Okanagan area have come down about 10% since the beginning of the year. That is a fairly aggressive drop. However, it’s all relative, we saw a very aggressive rise in prices between February and April.

    Prices generally do not change nearly as aggressively as other statistics. The reason for this is the resistance of sellers to acknowledge a downturn in the market. It is also important to note that all prices do not change at the same rate. For example, homes under $800,000 are staying fairly flat while homes over $800,000 are coming down more aggressively.

    This is following an age old rule; the market always corrects from the top down and recovers from the bottom up. What that means is that the lower price ranges are less affected by a correction. The reason for this is the buyer pool is larger in the lower price ranges so the demand stays stronger.

    Interest Rates

    On July 13, 2022 the Bank of Canada raised their overnight lending rate by a full percentage point. This was the highest increase in 20 years. The government is doing everything they can to curb inflation and that is what is slowing the market. We will likely see a continued trend if they raise the rates on September 13th.  I suspect the depth of the market correction will dig deeper then.

    As always, this is just the real estate world according to Rom. If you have any real estate questions give me a call or send me an email at any time.

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

  • Rom’s June 2022 Real Estate Opinion

    Rom’s June 2022 Real Estate Opinion

    What is happening to our house prices?

    In the Central Okanagan stats show that the average price has dropped slightly in May 2022 compared to April 2022. BUT! A month does not make a market.

    What it does mean is that the crazy frenzy of multiple offers (all over list price!) is over.  If we see a continued, gradual increase in interest rates that will be a strong indication of things to come.  Year to date our house prices are up 21%.

    Interest Rates

    On June 1st the government raised the overnight lending rate .5 percent (50 Basis points). That is the third rise since the new year. The talk is that they’re going to do the same thing on July 13th with the next overnight lending rate announcement.

    Personally, I think they should wait to see what the true effect is on the rises they have done so far on our housing market and our economy.

    My opinion is that the market will shift to a forecast of further declining prices (starting late May).  We will likely see a gradual drop in the high end market but a more significant drop in the median market.

    It’s still a Sellers Market

    The absorption rate (the percentage of properties sold versus inventory at any time) for May 2022 in the Central Okanagan was 28.86%. It is still a seller’s market. The absorption rate will have to go below 20% to show a true shift to reducing prices and a balanced market between sellers and buyers.

    I believe we will see a continued softening of the market as we go forward and as the government continues to raise interest rates.

    As always, this 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 April 2022 Real Estate Opinion

    Rom’s April 2022 Real Estate Opinion

    What’s happening in the Okanagan Real Estate Market?

    The Federal Government has announced 2 ways they are considering to slow down the upward pressure on house prices.

    Firstly, a proposed ban on foreign buyers purchasing houses across Canada for the next 2 years.  However, the percentage of foreign buyers in Canada has dropped from 9% in 2015 to only 1 % in 2020.  I therefore don’t think this will have any real effect on house prices.

    The second proposal is to invest billions into new construction. That is really the only way to slow down the house price increases.  The market is driven by supply and demand.  We either have to increase the inventory or decrease the demand.  The demand for housing in April is still strong in the Okanagan.  The absorption rate for March 2022 in the North and Central Okanagan is still above 60%. That means in March 60% of all the houses on the market on the first of the month sold in March.  Therefore increasing the inventory should work to slow down the market.

    We haven’t yet seen the effect on the market of the rising interest rates and in turn the increasing mortgage rates.  Although it is still a great time to sell your home (especially if you own a secondary home!!), the increasing mortgage rates will price more buyers out of the market. Increased mortgage rates and increasing inventory should help shift to a more balanced marketplace.

    The graphic below shows that the market is similar across Canada. The only place in the entire country where prices dropped was the Yukon and it was only by 1.5%. BC is in the top 3 for price increases.

    However, you always have to remember that this 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.