The Real Estate Market in the Okanagan Valley has taken a funny turn. The recession in the Okanagan Valley for Real Estate started in January of 2008 and finished in July or august of 2009. This was typical for a real Estate recession. They usually last about 18 months. By July of 2009 we were seeing the signs of recovery. Inventory of homes in Vernon and Kelowna was beginning to fall and the absorption rate was beginning to rise. By March and April of 2010 we were definitely in recovery and my Realtors had smiles on their faces once again. Then someone pulled the plug. In May, June and July of 2010. Sales fell, inventory rose and the absorption rate dropped like a rock.Thistrend was consistent in Kelowna, Vernon and Enderby housing markets. What happened? I was in awe. It took a couple of months to figure out but I beleive I have the answer. There were 2 major events that happened in 2010 that effected the Real Estate market. First the HST was implemented and second the lending requirrments for residential and commercial Real Estate mortgages were changed. However, one of these changes had much more effect on our market than the other. In June I stood up in front of 70 Realtors in our sales meeting and asked how many had customers that talked about or mentioned that the HST was a factor in their buying decision. Not one hand went up. Then I asked the same group of Realtors if they had customers that mentioned that the new lending requirrments had an effect on their home buying decisions. About a third of the hands went up. The new Real estate lending constraints do not effect a large portion of the buying public but they don't have to to make a big difference. If just 3 % of the home buyers out there cannot buy a home because of these changes then the people in the homes that they were going to buy can't sell. Then they can't buy a home and those people can't sell. It is a domino effect that travels like a virus right through the entire Real Estate Market. However, the good news is that we are still in recovery. We simply had a little kick that set the recovery back for a few months. The market will pick up in September as pent up demand for homes increases. The reason I know this is that the market is driven by emotions. The confidence of the buyers and sellers is much higher than it has been in a while. We still have a long way to go but the momentum if rising. I can tell you personally that I certainly look forward to getting back to a balanced Real Estate Market where consumer confidence returns and we get back to the wonderful business of helping people buy homes.
Broker/Owner of Century 21 Executives Realty Ltd. in Vernon
and Century 21 Assurance Realty in Kelowna