After four years of record gains in sale prices and volume, we are now in for an adjustment period.
- The pace of sales has dropped dramatically in January 2019. -40% against January 2018. And, January 2018 was down from the same period in 2017.
- Listing inventory is increasing. But, there is a story. Condos and Townhome inventory are way up. +23 for condos and +60% for townhomes. Single-family home inventory is slightly up at near 13%.
Where are the buyers?
There are plenty of buyers for the inventory that we currently have (except perhaps for those smaller townhomes). However, there has also been a record number of "collapsed deals" working through the system. These deals have been largely caused by the federal "stress test" mortgage rule requiring borrowers to qualify at 2% above the posted rate (which is really just preventing renters from ever owning a home). This policy, combined with the recent "speculation tax" targeting non-BC residents has created a lot of hesitation in the buying world this winter.
Why is the average sale price going up?
In these market cycles, prices tend to rise for a period of time. In our area it is because of the following;
- Seller's often overprice their listings then reduce it to sell but the net effect can still be a slight price increase for the neighbourhood.
- In times of uncertainty, Buyers migrate towards newer homes and homes with completed renovations and look for less expense after purchase. These are priced slightly higher.
- Inventory of Single Family Homes is still low. Inventory is generally considered to be the most important element in price fluctuations. Low inventory means higher prices.
- Interest rates are still historically low and affordability is still very high for the Okanagan.
What can I do to "sell well"?
- Read the weekly reports we send you. Showing feedback is helpful but "hits" are more important.
- Until the highways are clear, don't panic if you are not getting showings. More than 50% of our buyers DO NOT LIVE in the Okanagan and 0% of Vancouverites have snow tires. Patience.
- Price aggressively and watch your competition. The old adage... "you don't have to be able to outrun a bear to survive, you just need to trip your friend and run faster than them"... You may feel you are selling "low" but you will need to "offer a deal" to get the offer.
- You can turn down a low ball but you can't say yes to a promise...
As your REALTOR, What are we doing?
- We constantly re-post your listing to our social media channels to keep your listing top of mind.
- If we recommend a price change, even a small one, it will help you get back to the top of the list. If inventory grows in your area, this is an important step.
- We are "refreshing" all our marketing and making sure buyers, who are active in your area, see your listing.
- We are actively working with other agents who have active buyers making sure they know we are ready for showings and will quickly deal with offers.
- Every day, we do something to tweak your listing. And each week we stop, analyze the data and call you will our findings.
Experience tells us a lot. Luke and I have seen this market before. Things change fast! For this reason we like to keep in touch with you weekly; add in the amazing photos, drones and marketing we do, I am positive we will help you succeed in this market.
And lastly, 2019 will be, "The year of the deal". Once you sell, it is highly likely that we can get you a smoking deal on your next property. Some sellers will be in duress by May and we anticipate some excellent deals this year on RU6, Condos (later in the year), and Townhomes (by April). Single-family homes needing reno's (we are already seeing lots of pricing under $500k). Luxury homes over $1.2 million and waterfront (under $2 mil).
Having cash in hand later this spring could be very profitable.
All the best!
Associate Broker / REALTOR®
We would be happy to meet with your over coffee and provide you with an updated complimentary market evaluation of your home!