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Tag: Kelowna real estate news

  • 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writes a deal, the deal is not recorded as sold until the conditions are removed – which means the statistics could be outdated by up to a month.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 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 Dec 2022 Real Estate Opinion

    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!

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  • Rom’s Nov 2022 Real Estate Opinion

    Rom’s Nov 2022 Real Estate Opinion

    Okanagan Market Prediction

    The month of10 Things to Do to Make the Most of a Kelowna Winter | Hike Bike Travel 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!

  • Rom’s Oct 2022 Real Estate Opinion

    Rom’s Oct 2022 Real Estate Opinion

    Okanagan Market Prediction

    The market in the Okanagan for October is responding pretty much the way we anticipated. It continues to “Stabilize” or flatten out.  We are starting to experience the seasonal slowdown that we experience every year at this time. However, sales are down compared to last October.

    Past to Present October

    We need to keep in mind last October was not a regular October. It was a boom. The absorption is also down although not substantially. The Central Okanagan absorption is 12.49%. Basically, that number indicates that we are at the very bottom of a balanced market where absorption extends between 12 and 20%. If you look at the prices, they have come down approximately 10 to 14% since the first quarter of 2022. However, they seem to have leveled off.

    At the end of October, the Bank of Canada raised the overnight lending rate by 50 basis points (1/2 of a percentage). I believe they will do the same thing (maybe this time .25%), in the beginning of December.  Although this is a fairly aggressive rise in interest rates it’s not as aggressive as we’ve seen in the past few months. The overnight lending rate has gone from .25% to 3.75% in just a few months.

    Conclusion

    Although, the lending rate is having its effect on the market, and it is slowing down inflation and decreasing sales I think you will see the market pick up again as we step into the spring market at the end of February. We see a slow down every year at this time.

    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 Sept 2022 Real Estate Opinion

    Rom’s Sept 2022 Real Estate Opinion

    Okanagan Market Prediction

    308 Kelowna Autumn Stock Photos, Pictures & Royalty-Free Images - iStock

    The keyword for this month is stabilization. The absorption has stabilized, prices have stabilized and inventory has stabilized. There are some interesting things going on in this correction which is keeping this market stable and putting a fairly abrupt end to our correction, for now.

    Unemployment

    The most important one being that unemployment is at an all-time low. In most corrections unemployment rises. This country is seeing a new paradigm where businesses cannot get people to work. There are high paying jobs right across this country with no one to fill them.

    However, we expect another aggressive interest rate hike, possibly 75 points and at least another 25 points? hike in November or December this year.   This will likely put a damper on the stabilization in the upcoming months.

    Conclusion

    We have been getting so used to record low mortgage rate hikes and therefore it will take a while to get used to these higher rates.  However, keep in mind that the average interest rate since 1990 is 5.79%. We are still about a half a point below that average.

    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.

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    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 October Real Estate Stats & Opinion

    Rom’s October Real Estate Stats & Opinion

    Okanagan Real Estate Report October 2021

    *click images to enlarge

    Rom’s Real Estate Opinion

    This month the overall message for our real estate market is positive, (with a little bit of caution). The market is cruising along just as we predicted. Perhaps a little better than we predicted.

    Let’s talk Absorption

    The absorption (percentage of total residential inventory that sells on a monthly basis) in the Central Okanagan is staying strong at slightly above 50%. Usually there is downward pressure on absorption this time of year as the market slows for the winter. If you look back on previous years the absorption tends to start dropping in September and continues until spring. That has not happened yet.

    Again, to be redundant, the absorption has to get below 20% before the upward pressure on prices levels off. Statistically, absorption has to get below 12% before you see prices trending downward. Year to date prices for residential properties are up 20+% in the Central Okanagan compared to the same time frame last year. Keep in mind this is residential properties only.

    The Commercial Side

    The commercial/industrial market, although not as robust as the residential market, is also showing strong gains. Most of the excess inventory we saw 3 to 5 years ago has been eaten up and prices per acre of industrial land are rising. Commercial lease rates are also rising and demand for development land is increasing. We are seeing more and more developers coming to the interior as they realize the lack of inventory is like a carrot in front of the donkey they are riding on.

    Interest Rates

    Now, here is the caution I spoke of. The Bank of Canada has decided to ease off a program called “Quantitative Ease” (QE). I am not an economist nor would I propose to understand the intricacies of this but here is what I know so far. The QE program is designed to push inflation and avoid deflation. The Federal Government buys billions in bonds weekly; which somehow keeps interest rates down, pushing people to buy more “stuff”: cars, houses, etc.

    As of October 27, the Feds have decided to diminish these purchases to slow down inflation. This will put upward pressure on interest rates. We have already seen borrowing rates rise slightly in the last few weeks. At this stage I am not sure what will happen to interest rates or the effect on our demand for Real Estate in the Okanagan. I don’t think you will see huge jumps in interest rates. It would shut down the economy. Rather they will “creep” them up.

    It does not take a rocket scientist to figure out that as interest rates went down, more people qualified and were able to buy. So guess what? As interest rates go up, less and less people will qualify to buy.

    In Conclusion

    I doubt we are going to see anything but a continued minor slow down as we end the year and walk into 2022. However, 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 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.