RomRealty

Tag: kelowna trends

  • 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 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 Real Estate Opinion & Stats August 2020

    Rom’s Real Estate Opinion & Stats August 2020

    Kelowna Real Estate Report August 2020

    Rom’s Monthly Real Estate Opinion

    What a whirlwind summer it has been for Okanagan Real Estate!  The market continues at a record-breaking pace.

    Looking at the stats for this month, remember that low inventory is the sign of a robust real estate market, not the opposite! Some of the stats we look at have never been this robust and some we would have to go back years to find a comparable level.

    There is a lot of speculation from realtors, investors, buyers and sellers as to what is going to happen in the near future. Most people think that when the government subsidies go away, the real estate market is going to soften or collapse. However, a market never responds to one force. 

    Multiple positive forces also pushing on the marketplace in the Okanagan! We have dramatically increased migration from Alberta and the Lower Mainland, there are some of the lowest interest rates in history, very low inventory (which pushes up price!), and the back-log demand created from the drop in sales from COVID-19 in April/May.

    Stats to consider

    Each year the market softens in the fall, so some may anticipate the market turning down. However, when we compare August 2020 to August 2019 stats, it tells a positive, robust story. Residential sales for August decreased slightly to 1,034 compared to July’s 1,094 total units sold across the region yet remained up compared to this time last year by 43%, reports the Okanagan Mainline Real Estate Board (OMREB).

    I believe that we are in a fairly robust market for a while to come still.  The one change we cannot predict, is if COVID-19 cases were to dramatically increase that shuts our market down again.  However, I don’t think this is going to happen again.

    As always. please remember this is just the Real Estate World according to Rom. Get out there and enjoy the beautiful Okanagan Fall season!
  • Rom’s Real Estate Opinion & Stats June 2020

    Rom’s Real Estate Opinion & Stats June 2020

    Kelowna Real Estate Report June 2020

    Rom’s Monthly Real Estate Opinion

    Below you will find the ‘benchmark’ prices for properties. This provides us with a much better idea of the current market rather than using ‘average’ or ‘median’ prices.  ALL property prices (Condo’s, Townhomes and Single Family), went UP compared to June 2019.  
    Despite the Pandemic, the real estate market is active and properties are selling. Moreover, the market has bounced back to an astounding level. It is right back to where we thought it would get to before COVID-19 hit. There is no algorithm for the effects of COVID-19 on the Okanagan Real Estate market. World renowned economists really don’t have any idea either. 
    In Kelowna, the absorption rate for June was 24.39%. This means that 24.39% of all residential inventory in the Central Okanagan sold in June!  It hasn’t been that high since April 2018. There were 261 residential sales in June in the Central Okanagan. That is the highest number of sales since July 2017.

    So, what is going on?

    How can the market be flourishing when unemployment has shot up and the GDP has shot down? There are 2 factors creating this.
    First, banks and governments have stepped up hugely. The pandemic did take eligible buyers out of the market. However, every time the interest rates dropped another fraction of a percentage point, multiple new buyers were now able to buy. Remember, the market is driven by the buyers. There was also a backlog of buyers who were ready to purchase but were waiting out the Pandemic.  Since we entered phase 3 here in BC, consumer confidence returned and therefore real estate activity spiked.
    Second, the market and the economy are not doing well in Alberta. Edmonton seems to be doing slightly better than Calgary but they are both hurting because of COVID-19 effects and the bust of the petro-chemical industry. This is driving some to pull that retirement trigger earlier than previously planned and move to the Okanagan. 
    Please remember this is just the world according to Rom.
  • Rom’s Monthly Real Estate Update May 2020

    Rom’s Monthly Real Estate Update May 2020

    May 2020 Kelowna Real Estate Report

    Yearly Comparisons – Sales and Prices for May 2019 vs May 2020

    *Please click on images below to enlarge

  • Kelowna condos – Now a good time to buy or sell?

    Kelowna condos – Now a good time to buy or sell?

    Is it now a good time to buy or sell your condo?

    These have been challenging times for all of us and some of the real estate market sectors have been and will be hit harder than others.

    I am expecting the condo market to take quite a hit; maybe not right away but over the next few months.  When comparing the condo market from April & May 2019 to April & May 2020, the Median Condo prices are already down by 7%.

    I feel that these are the main contributors to this happening:

    1. Market saturation of new condo’s, especially in the downtown core of Kelowna

    2. New tightening rules of CMHC that will be in effect as of July 1, 2020.  This will make it more difficult for (first time) home buyers to qualify for financing

    3. Mentality shifts as a result of the COVID-19 pandemic. Buyers prefer to live in a single family home with their own yard rather than dealing with elevators and small living spaces.

    Therefore, I expect that the demand for 1/2 duplexes, townhomes and single family homes will increase.  However, I don’t think the market of condo’s under the $425,000 price mark will be touched by this.  This is simply because at that price point there is no alternative to a condo.

    Please remember that this is just the real estate world according to Rom.

    Have a real estate question? You can contact me anytime by text, phone or email.  I would love to have a chat with you to discuss the market or your buying/selling plans. I look forward to hearing from you!

  • FOR SALE: Condo in Kelowna’s Cultural District!

    FOR SALE: Condo in Kelowna’s Cultural District!

    FOR SALE: 315-1331 ELLIS STREET, KELOWNA, BC$418,800

    NEW LISTING!

    Beautiful and spacious two bedroom, two full bath condo in the heart of Kelowna’s downtown cultural district! Abundant natural light from large windows and 10’ ceilings fills the condo. The loft windows of sunrise views over Black Mountain and Knox Mountain. The split floorplan places both large bedrooms on either side of the main living area to create more privacy and great rental potential.

    The condo has been freshly painted and there is new vinyl plank flooring installed in the main living areas and both bathrooms. Other upgrades include a “silent” Bosch dishwasher and new hot water tank. The large patio with gas hookup provides for a relaxing outdoor living space.

    Perfect location in the downtown core only steps away from coffee shops, restaurants, shopping and events. Only one block away from the beautiful lakeshore and all the water sports and beach amenities that Kelowna has to offer!

    For more details, please contact Rom Houtstra at 250-317-6405 or email him at rom@romrealty.com.

  • Rom’s Kelowna Real Estate Opinion January 2020

    Rom’s Kelowna Real Estate Opinion January 2020

    Kelowna Real Estate Opinion for Jan 2020

    We are well into the swing of things for 2020. I hope you are continuing on with any resolutions and visions you set for yourself for 2020! It’s never too late to get back on track. For this months opinion, I will start off with a couple of real estate definitions:

    • Market Correction: A downward trend with prices, absorption and sales reducing, and inventory and DOM (days on market to sell) increasing
    • Market Recovery: An upward trend with prices, absorption and sales increasing, and inventory and DOM (days on market to sell) decreasing

    One of the important differences when comparing the Real Estate Market to the Stock Market is that the Stock Market is global and the Real Estate Market is local. The old phrase, “location, location, location” is not only important in real estate.  It causes a lot of misunderstandings with ‘experts’ who try to predict the Real Estate Market (including a lot of realtors). The press will grab onto anything that looks radical in the market. Then they report without a lot of reference to the relevance of the information or the differences in the various locations. The problem is that the public gobbles up whatever the press feeds them. This problem is relevant in the Real Estate statistics in the Okanagan right now.

    Current Okanagan Situation

    Currently, when we look at the statistics, the Okanagan is in recovery mode. Around the third quarter of 2019, it started to shift from a slight correction to a slight recovery. Here in the Central Okanagan, there was a bit of a lag for the last couple of years.  We have a larger economy than some surrounding markets. Therefore, it was building up rebound pressure. We are now seeing a positive market bounce back! It will be interesting to watch as we proceed through 2020 if this trend continues. I expect big markets like Vancouver and Toronto will continue to recover.  This means for the Okanagan that we will be in a very gradual recovery trend for the next couple years.

    As always, this is just the Real Estate World according to Rom.