A combination of personal observations and reports from other sectors are raising the questions in my mind... is our local real estate market at or near a bottom? I looked at 4 very different market indicators and found that they all point to the same answer... yes, our local North Okanagan real estate market may be at or near a bottom.
My preliminary look at the North Okanagan sales statistics for May 2009 show a total of 151 residential home sales. If you look at the 5-year rolling summary table that I publish monthly (view it here) you can see that number exceeds May of last year by 13 homes or 9.5%. From that table you can also see that we have not seen this kind of year over gain for 15 months, since February 2008. Many people are telling me and I am personally observing a lot more SOLD signs as we drive through our community. Let's wait and see what the official statistics report next week.
Last week on May 26, 2009 the British Columbia Real Estate Association (BCREA) issued a press release titled BC Housing Market Stabilizing. In that press release they provide details of how they have adjusted their home price forecast for 2009. They found that based on activity to date, prices in BC may only decline 8% compared to the 13% decline originally forecast at the beginning of 2009. You can click here to read how affordability reaching a 3-year high in April 2009 has contributed to stabilizing BC's real estate market.
On Friday, several major Canadian banks increased mortgage interest rates in response to changes in the bond market as the 5-year bond rate increased. Any buyers who have been out looking and are almost ready to buy will be encouraged to lock rates in today for a typical 90-day rate guarantee period. This means these buyers will be out working harder over the next 90 days to find and buy the home they want. This will put downward pressure on inventory and help to stabilize prices and slow or stop the rate at which prices have been falling.
In Alberta, we have read reports that the inventory of available homes on the market has been dropping since the beginning of the year. Those who have monitored real estate trends in the last 20 years know that trends in the Okanagan real estate market tend to follow the trend patterns of the major markets in Alberta. That's because a lot of our buyers come out of that market. Again, when inventory falls in Alberta, it's only a matter of time before we see the same thing happening here and when inventory of homes available for sale goes down, prices stabilize or go up.
These market indicators may be telling us the good news that stability and sanity are returning to our local real estate market in the North Okanagan and neighbouring communities of Vernon, Armstrong, Enderby, Grindrod, Salmon Arm, the Shuswap, Falkland, Lumby and Cherryville.