Tag: Kelowna Buyers

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writes a deal, the deal is not recorded as sold until the conditions are removed – which means the statistics could be outdated by up to a month.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!

February 21, 2024
Rom’s September 2023 Market Review for the interior of BC

There are three terminologies that I personally use to describe what is going on in the real estate market in the Interior of British Columbia. They are: “a leveling off”, “a recovery”, and “a correction”. In the last two years we’ve gone from a recovering real estate market (Rising) to a leveling off and we are now in a correcting market. The characteristics of a correcting market are; reducing absorption (less properties sold in a said period of time), reducing sales, reducing prices with rising inventory, and rising days on the market to sell. That is exactly what we are experiencing right now. These five activities are happening all over British Columbia and likely throughout the rest of Canada or at least in most locations in Canada to various different degrees. The reason is that the major driving force pushing the market down is rising interest rates. Interest rates are governed federally.

My prediction in the market going forward is that we will likely have 9 or 10 months of a correcting market. In the third and fourth quarters of 2024 the correcting market will likely start to level off. This will be spurred by the Bank of Canada starting to inch the interest rates down as inflation gets more under control. The correction will not be a dramatic drop in prices. We will likely see a moderate drop in prices. Perhaps a further 10%. The reasoning behind this assumption is that immigration is maintaining a relatively high demand and low inventory is maintaining a relatively low supply. This is why we have not seen a huge drop in prices so far.

There are quite a few assumptions built into my prediction that may or may not come true. For instance, if the Bank of Canada continues to raise interest rates the correction will pick up speed and will last for an extended period of time. I see this ending in the last two quarters of 2024.

We have had quite a few years of robust markets. British Columbia has the highest Real Estate prices of any province or State in North America. We recently passed Hawaii.

Some of you may disagree with me or even dislike me for saying it but,”We needed a correction”.

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

October 10, 2023
Rom’s May 2023 Real Estate Market Opinion

Okanagan Market Prediction

Market on the Rise

When interest rates stopped rising and leveled-off, we changed our predictions to a slow gradual increase over the balance of this year. That was contradictory to a lot of opinions that were more negative. It appears we may have been a bit light in our optimism.

The market is actually heating up at a more robust pace than we anticipated. Absorption is up well over the 20% mark. Prices are continuing to rise. Even though the inventory remains a problem and demand is far exceeding supply, sales are rising compared to last year at this time.

People are figuring out how to cope with and deal with the highest prices in Canada because people want to move to paradise.

Interest Rates

However, the Bank of Canada pushed up the overnight interest rate on June 7 by 1/4 of a point for the first time since the end of last year. In my opinion their reasoning is obvious. Inflation was steadily marching down from a peak of 8.1 % in June of 2022 to 4.3% in April of 2023. Then it jumped to 4.4% in May. The target rate is 2%.

House prices across the country have started to increase and although that is good for homeowners it is not good for home buyers. The bank will continue to raise interest rates until it sees inflation resume its downward direction.

However, you always have to remember, this is just the real estate world according to Rom. Have an awesome month and enjoy the upcoming summer.

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

June 17, 2023
Rom’s Dec 2022 Real Estate Opinion

Okanagan Market Prediction

The Year 2022

2022 was a whirlwind of a year. In the first quarter of 2022 our prices rose, our absorption was through the roof and sales were record highs.

After that it’s been mostly downhill. By the second quarter of 2022, prices dropped an average of 10 to 15%. Then they levelled off. Prices have remained relatively constant since the end of the second quarter.

December

Absorption dropped dramatically in December. However, if you look back historically December absorption generally has a fairly dramatic drop from November. This is simply because half of the month is spent around vacation, holidays and family.

What’s ahead in 2023?

It will be interesting to see what happens in the first quarter of 2023. I believe there will be some downward pressure on prices in 2023. This will be caused by a continued increase in the interest rate.

The next announcement for the Bank of Canada is on January 25th. My guess is that it will either be raised 1/4 or 1/2 of a percentage point. These two possibilities will have very different results to the buying consumers across Canada.

A quarter of a percentage point will show that the Bank of Canada is softening their approach on interest rates. A half of a percentage point will show the consumers in Canada that they are definitely not finished yet. If interest rates go up another half a point at the end of January we will see continued softening in sales and prices.

“After a very strong first half of 2022, we began to see market activity moderate amid consistently rising interest rates imposed by the Bank of Canada,” says the Association of Interior REALTORS® President Lyndi Cruickshank, adding that “although inventory levels remain tight, the high interest rates will continue to subdue market activity in the coming months.”

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!

January 15, 2023
Tax Fighter Guide for HomeOwners

Tax Fighter Guide for the Homeowner

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January 12, 2023
Rom’s Nov 2022 Real Estate Opinion

Okanagan Market Prediction

The month of November is following in the tracks that we expected it to. The first quarter of 2022 saw a huge price increase. The second quarter saw a 10 to 15% price drop.

Past to Present November

Since then it’s been flat as a pancake. Prices and absorption have stabilized for the last 4 or 5 months. The real change has been the number of sales. The number of sales in November of 2022 is basically half what they were in November of 2021.

A Balanced Market

Sellers are no longer sitting with their REALTORS trying to decide which offer, over list price, they are going to accept. They are having to be more conservative with pricing and they have to consider their first offer because there might not be another one.

As much as this seems like the sky is falling it really is simply “back to normal”. This is what a balanced market looks like. It just seems worse because it followed such a boom.

Interest Rates

There is still downward pressure on prices but the market is resisting….for now. The interest rates will tell the last chapter of this story. On December 7th the Bank of Canada raised its interest rate by 50 points to 4.25%. The bank also signaled that a pause in rate hikes could be coming. Although I think there may be one more increase at the beginning of next year.

However, you always have to remember, that is just the real estate world according to Rom. Wishing you and your family a Merry Christmas and a very happy new year!

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

December 9, 2022
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!

August 19, 2022
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.

June 23, 2022
BUSINESS FOR SALE: Profitable Okanagan Based Wood Panel Manufacturing Company

Okanagan Wood Panelling Business For Sale

One of the cleanest, highly profitable businesses available – this Okanagan wood panelling manufacturing business offers an ease of operation with 8 long term employees. Two key staff can run the manufacturing end of the business. Little competition with export around 70% to the US.

25 plus years of successful operation with well-established repeating markets and customer base. Extremely profitable with 15% projected growth for this year. Cash business with room for additional growth and product diversity. Business is on major route for trucking to the US and Canada.

This is a great opportunity to own a reputable, profitable business AND live in one of the most desirable areas in Canada and the world. The Okanagan is a true 4 season playground offering boating, hiking, skiing, award winning wineries, championship golf courses and more. Don’t miss this special opportunity!

Current owners prefer a buyer who is willing to relocate to the Okanagan and purchase the 2.2 acres of land & buildings. If interested, upon signing the NDA, I will provide you with an information package and video explaining the business and manufacturing process.

Contact me today for more information.

May 9, 2022
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.

April 16, 2022