RomRealty

Tag: kelowna realtor

  • 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 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 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 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.
  • Rom’s November Real Estate Stats & Opinion

    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.

  • Rom’s July Real Estate Stats & Opinion

    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.

  • Rom’s May Real Estate Stats & Opinion

    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.

  • Rom’s April Real Estate Stats & Opinion

    Rom’s April Real Estate Stats & Opinion

    Okanagan Real Estate Report April 2021

    Rom’s Real Estate Opinion

    In the current whirlwind real estate market, we are hearing many stories emerging of how fast-paced and wild the home buying process has become. I wanted to share a story with you all today.

    Home Buyers Debacle

    A local realtor detailed an experience she had trying to find a home for her clients to purchase. Her buyer clients had lost out a few deals by being out bid. They finally found a home they were not going to be outdone on and they offered $100,000 over list price. They considered not putting in any conditions because their financing was a slam dunk at only 20% loan to value and they trusted what they saw in the house when they viewed it. However , they were advised by their mortgage broker to put a condition of financing in anyways.

    They did not get the deal. The were told the winning offer was $50,000 less than their offer but had no conditions. The sellers put more value on getting a firm decision than getting another $50,000. My Realtor said the buyers were angry and blaming the other side. However, this is like no fault insurance. The sellers are just taking the best offer for them in their minds. The seller’s Realtor is just looking after their client. The buyer’s Realtor was careful not to push them to go into a risky situation. The mortgage broker was being cautious and protecting the buyers. If anyone is to blame it would be the buyers because they did not choose to take the risk. How can anyone truly blame them for that?  This is one crazy market when we are actually discussing that putting a single condition on an offer and offering $100,000 over list price was too conservative. At the end of the day people have to calculate and be comfortable with their risks. Then they have to accept the consequences and move on.

    Kelowna Stats

    The Stats this month are off the charts, in the stratosphere, or any other similar metaphor I can come up with. This month Kelowna’s absorption is 88%. That means that 88% of all the houses on the market on April 1 sold in April. The average days on market to sell (DOM) was 23 days in Kelowna. What that means is that the listing was activated, an offer was negotiated and all conditions were removed in less than 23 days.

    Conclusion

    On top of all that there is not a shred of hard evidence indicating that this market is going away anytime soon. Those who believe the bubble is going to burst are simply speculating and guessing at this point. However, even a broken clock is right twice a day. Sooner or later things will change.

    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.

  • Rom’s March Okanagan Real Estate Stats & Opinion

    Okanagan Real Estate Report March 2021

    Rom’s Real Estate Opinion

    Imagine in any given market, statistics were so off the charts that an experienced analyst says, “It must be a typo”. In March the absorption in the Central Okanagan was 99.76%! What does that mean? In March, virtually all houses that were on the market at the beginning of the month, were sold by the end of the month.  That is truly unbelievable.
    The average DOM (Days on Market to sell) in the Central Okanagan was 33 days. That is less than half of the 10 year average. The average sale price in March in Kelowna was $160,000 higher than the average sale price of the last 12 months. That does not mean prices have gone up that much. I had one Realtor tell me that he believes the market is rising $10,000 per month. There is no question, the Okanagan paradise we live in is no longer a secret.

    What does this all really mean to consumers and Realtors?

    People think we as Realtors must be having a heyday. In fact, I don’t think I have ever seen Realtors so frustrated. Almost all Realtors care deeply about their clients. They work hard to write offers that are legal and enforceable and with clauses to protect their clients, only to lose out to a higher bid over and over. Naturally, that is very frustrating for buyers and Realtors.
    One way to get an advantage for a buyer is to write an offer with no conditions on it. When the seller signs the offer the house is sold which gives that particular buyer an advantage over one with conditions. The problem is there are risks involved. A good Realtor will explain those risks in detail but at the end of the day buyers are looking for any way to create an advantage  for their offer. If you are a buyer in this crazy market be sure you understand the possible worst case scenarios if you make this type of offer. It does not mean that you should or should not make an offer like this. I personally have done it many times. It simply means you have to be informed, prepared and comfortable with the risks. Real Estate environments like this have been historically common in cities like Vancouver and Toronto but it is new here.

    Final Thoughts

    People are moving here in droves and there is no indication that this is going to let up any time soon. Our job is not to tell buyers what to do. It is to make sure they understand all their options, all the risks involved in those options and then take instructions from our clients. As a buyer you must move fast in this market to get the house you want. Pay attention to your Realtor, listen to their advice, make an informed decision and then act and act fast if you want to get a step up on all the other numerous buyers that are likely looking at the same property.

    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.

  • Rom’s January Okanagan Real Estate Stats & Opinion

    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.