Tag: kelowna real estate

Rom’s Sept 2022 Real Estate Opinion

Okanagan Market Prediction

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.

NEW COMPLIMENTARY SERVICES FROM MOVESNAP

Enjoy an exceptional home moving experience with MoveSnap.

The complimentary digital platform and concierge service offers everything you need to conquer your moving tasks. From helping with organizing your to-dos and sourcing vetted pros to money-saving offers from big-name and local brands, MoveSnap lets you streamline and reduce the stress of moving.

Plus, the live concierge team expertly guides you through your move-related questions throughout your moving journey.

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

October 21, 2022
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!

September 21, 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
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
Rom’s November Real Estate Stats & Opinion

Okanagan Real Estate Report November 2021

*click images to enlarge

Rom’s Real Estate Opinion

The real estate industry is full of surprises; never a dull moment. That’s why I love this business so much. Very often people quote “history repeats itself”. It’s pretty hard to find historical data that illustrates that history is repeating itself in the Okanagan Real Estate market. This is all new territory.

Winter Real Estate

It is the time of year that, historically speaking, things should slow down. There are other reasons for a slowdown too. Interest rates are rising and consumer confidence is skeptical as to whether this market can sustain itself. People are expecting a slowdown. “The bubble has to burst”, some of my clients are saying.

However, the stats don’t lie and they never will. What’s happening in the statistics in the Real Estate market? They are RISING. If you recall last month I referred to the expected slow down and decrease in absorption simply because of the winter months. However, in November the absorption rate is rising.

Let’s check out the numbers

In the Central Okanagan, 71% of the residential inventory sold in November, up from 54% in October. Not only that, the inventory actually went down. What does this mean? As bizarre as it may sound, the demand for Real Estate in the Okanagan, which is already higher than ever in recorded history, is now starting to increase again. Prices are going to continue to rise.

The fact that we all live in paradise is no longer a secret. In my opinion over the next few months it has to soften a bit because winter is here. It softens every year at this time. However, as we get closer and closer to 2022 it is setting itself up for a very hot spring in the Okanagan Real Estate Market.

In Conclusion

As always this is just the real estate world according to Rom. Have an amazing Christmas and stay safe and healthy. Wishing you a Happy New Year and an end to this Pandemic in 2022.

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.

December 16, 2021
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.

September 19, 2021
Rom’s July Real Estate Stats & Opinion

Okanagan Real Estate Report July 2021

Rom’s Real Estate Opinion

The market is progressing exactly in the direction that we anticipated. Things are settling down but definitely not crashing.

Think of the market in the last year as something like a Chicken Little scenario from the 1943 Disney Movie. For the last 6 months the market has been running around with his hands waving in the air screaming and yelling that the sky is falling. In other words, the absorption was ridiculously high, the inventory was ridiculously low, monthly sales we’re breaking all historical records and price increases we’re breaking all historical records.

What’s happening now is Chicken Little is settling down. The absorption in the Central Okanagan (Peachland to Lake Country) has now dropped to between 40 and 50%. The inventory is still very low and sales have dropped to a reasonable level. However, let’s keep this in perspective. Absorption between 40 and 50% is still off the charts for our area. A balanced Market is considered to be 12 to 18% depending on which expert you listen to. Below 12% indicates that you can expect price decreases and it is also considered a strong buyer’s market. Above 18% is considered a seller’s market and you can expect price increases with this level of absorption. 40% is a long way above 18%…

Where is the market going to go from here and why?

What has to change in order for prices and sales to drop dramatically? If we look at the inventory for July 2021 and compare this with inventory levels in July 2020 and 2019 then this July inventory level is less than half the other 2 year averages. Although over time inventory levels will typically gradually increase as more houses will be built, more construction and development. However, in order for the market to change dramatically to even approach a balanced Market the inventory has to increase dramatically; likely more than double. Is this going to happen? This is the big question. We will not get rid of multiple offers on the same property until that inventory increases. That is just basic logic.

Conclusion

I think we will see this present direction of the inventory, absorption and sales start to level off at these relatively higher levels. The market has settled down from its Chicken Little level to its “normal” place in the regular cycle.

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. As always have to remember that’s just the Real Estate World according to Rom.

August 16, 2021
Rom’s May Real Estate Stats & Opinion

Okanagan Real Estate Report May 2021

Rom’s Real Estate Opinion

There is a very tiny crack in the foundation of the Real Estate market in the Okanagan right now. Sales are actually down in the Kelowna area. If you look back over the years there is almost always an increase in sales from April to May. The tiny crack continues into the absorption rate (the amount of sales versus the amount of listings at any time). There is almost always an increase in absorption from April to May; this year it is actually down.

One of the phrases that I use in real estate is “A month does not make a market”. In other words this may just be a slight downward blip. If this is a real trend, it will continue for at least the next few months. I do believe this is what we will see. There will be a slight flattening of the market in the next few months but it will hardly be noticeable.

There are 2 possibilities to explain this change. First, the market is starting a minor (or major!) correction. We have peaked and will start to see things settle down. Second, the market is “too good”. We saw this happen in 2007. The demand is so high and the supply is so low that sales are decreasing because people have nothing to buy. In my ever so humble opinion it is a combination of the two.

The market was so ridiculously hot that it could not sustain itself. It was inevitable that it was going to slow down at least to light speed. Many Realtors are saying that their buyers are saying “I give up”. They have been disappointed so many times making offers on houses and losing out to other buyers. Some buyers have decided not to make their move until the market slows a bit and there is more inventory to choose from.

Conclusion

Personally, I am glad to see this crack in the foundation. The market was super hyper. It was no fun telling my buyers to go into a multiple offer battle, $50,000 over list and still have no chance of getting the property they want. It needed a bit of a time out.

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. As always have to remember that’s just the Real Estate World according to Rom.

June 18, 2021
Rom’s January Okanagan Real Estate Stats & Opinion

Okanagan Real Estate Report January 2021

Rom’s Real Estate Opinion

The Okanagan Real Estate Market is continuing its robust, upward direction. Many houses are currently selling for above list price! All signs point toward another robust year.

A question I hear a lot these days is, “Is now a good time to sell”? Absolutely it is! This is one of the few times in my 18 years in this business where sellers do NOT think their homes are worth more than they are. Most sellers are surprised by what they can get for their home.

Recent Scenarios

I just had a new listing that some Realtors commented was ‘overpriced’. However, I received a total of 4 offers in 48 hours and one offer was $30,000 over list price. These stories are not the exception; they are the norm in this market. Just recently, an original condition 1974 home with a lakeview in the Lower Mission, Kelowna area had 15 offers! It was listed for $650,000 and then sold for $110,000(!!) over list price at $760,000.

If you are thinking of making a move in the next 5 years, now is probably the best time you will see to sell your home. However, one has to be a little cautious. You have to remember that the reason prices are rising is the inventory of homes to buy is so low.

Adding in Offer Subjects

There are 2 ways to avoid being homeless when you sell your home. First, you can put in your offer: “Subject to the sale of your home”. This means that you put an offer on a house that will be conditional to you selling your home. The problem with this solution is that this is viewed as a fairly weak offer, especially in this market. The seller has to count on you, the buyer, to price his or her home correctly to sell before they know their home is sold. In this market there are likely offers without this stipulation which puts you in a poor negotiating position.

The second way, in my opinion is the better way to solve this issue. As your Realtor, to protect your best interest, I will put the following clause on the contract: “Subject to the seller finding suitable accommodation on or before (Date). This condition is for the benefit of the seller”. What this means is the sale of your home does not go through unless you find a home to buy or rent and then remove this condition in writing. The reason I think this is a better option is it is an extreme seller’s market. A buyer has much more motivation to allow the seller to find a home than sellers have to allow the buyers to sell their home. You will likely be more successful with the later solution than the former one.

Final Thoughts

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 or it can be done completely remotely if you prefer. It is totally free. As always, this is just the Real Estate World according to Rom.

February 19, 2021