Is the sky really falling?
We now have the first quarter of 2018 under our belt. We are seeing a very moderate softening of the market. When we compare the Stats of the first quarter of 2018 to the first quarter of 2017 we see prices still rising slightly in the Central Okanagan (Kelowna). However, the absorption is down to 26% in the Central Okanagan. The same ratio is evident with the housing inventory that is on the market in the first quarter. The inventory up in the Central Okanagan. These 2 statistics, the absorption and the inventory, tell the most accurate story when trying to predict the market because they are the indicators of supply and demand. In a rising market the inventory is falling and the absorption is rising. In a falling market the inventory is rising and the absorption is falling. The absorption is the percentage of inventory that sells on a monthly basis. What does all this mean in a nutshell? The market is going to continue to soften slightly in 2018 but we really won’t notice much. At the end of 2018 we will see an overall increase in prices, my guess is about 5% but not as dramatic as 2016 or 2017 (13-15%). This is in line with the predictions of the senior analyst Taylor Pardy of the Canadian Mortgage Housing Association (CMHC). There will be less multiple offers and a little more price reducing as Sellers are forced to more competitive. But that is just the world according to Rom.
