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Tag: kelowna real estate stats

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writes a deal, the deal is not recorded as sold until the conditions are removed – which means the statistics could be outdated by up to a month.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

  • Rom’s Real Estate Market Opinion – Dec 2023

    Rom’s Real Estate Market Opinion – Dec 2023

    SEASONS GREETINGS!

    It is a wonderful time to reflect on this year and I am feeling grateful and blessed for the support I receive from you, my clients and friends. I hope to continue being able to support you with all of your real estate needs.

    In October I mentioned that the Real Estate market in the Interior of BC was showing the beginning signs of levelling off. That levelling has continued into November which gives us one more month towards any kind of certainty that this correction is over.

    The Bank of Canada has maintained its overnight lending at 5% for the 4th consecutive time. The main reason for this is the inflation rate has come down to 3.12%. That is in contrast to 3.8% last month and 6.9% last year at this time.

    Therefore, it is getting close to their target rate of 2%. As far as corrections go, this was a pretty mild one. In 2008 the correction lasted 4 years.

    Here’s an interesting point: people talk of prices going down. Even in a correction, prices rarely go down substantially. When the year ends, prices in 2023 will have been stabilized and we didn’t see much of a decline at the end.

    I expect in 2024, a rise in house prices around 5-6%. In 2024 I expect the Bank of Canada rate to go down by 1-1.5%.
    Looking forward to a happy and positive 2024 for all, and as always, this is just the real estate world according to Rom. Wishing you, your family and friends a fun and relaxing Christmas and holiday break!
  • Rom’s May 2023 Real Estate Market Opinion

    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!

  • Rom’s April 2023 Real Estate Opinion

    Rom’s April 2023 Real Estate Opinion

    Okanagan Market Prediction

    Cruising along

    The market is cruising along as we expected it would once the interest rates levelled off.

    Absorption is rising and is now above 20%. Prices are starting to inch up as well. Sales activity is still lower than normal when you compare April 2023 to April 2022. The reason for this is a lack of inventory.

    Fun Fact

    Here’s a fun fact… Of the G7 countries (Canada, France, Germany, Italy, Japan, England and the United States), Canada has the lowest housing per 1,000 people. France is in first place.

    In order for Canada to catch up to France, we would have to build 3.5 million more homes on top of the 2.3 million homes expected to be built by 2030. On top of that, Canada has now increased its annual immigration goal to 500,000 per year.

    What all this tells us is that the inventory problem is not going away any time soon and is going to get worse before it gets better. The result of that is continued upward pressure on prices; the very thing the government is trying to avoid.

    Rest of 2023

    Prices will rise slightly for the rest of 2023. Interest rates look like they are going to remain steady for a while which will gradually increase buyer demand further.

    It’s a great time to buy Real Estate in the Okanagan!  However, you always have to remember, that’s just the 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 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 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 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.