Most people will not believe that. However, most people did not believe me when I said that the market is starting a correction in the last quarter of 2006 either.
The Real Estate Market is actually very predictable.
There are certain specific statistics that fluctuate with the market. Most of them change long before prices do.
First, we have the inventory. Even though I am an investment realtor in the Okanagan, the specific inventory statistic I watch is the total residential, MLS inventory. I know that this is the stat that will lead the others like commercial inventory or industrial inventory. In the last quarter of 2006 the inventory was as low as it has ever been but was starting to rise. This was the first indication that the market was going to correct even though the correction was not obvious in prices and activity until the first quarter of 2008 approximately 15 months later.
The inventory today in the North Okanagan is leveling off and starting to inch down. If that trend continues prices will start adjusting up about a year to 18 months from now.
The next Statistic to watch is the absorption rate.
This is the percentage in total residential inventory that sells in a month. In other words if there was 1000 residential units on the market in April and 100 of them sold in April, the absorption rate for the month of April would be 10%.
The Absorption rate in the North Okanagan at its highest point reached 50% in 2005. That means that 50% of the inventory was selling in those months. At its lowest point in late 2008 it reached 3.5%. The absorption rate is now around 7% and continuing to inch up.
This is the next indicator that the Okanagan Real Estate Market is in recovery. However let's be realistic. Compared to the stock market the Real Estate market changes very slowly and price is always the last stat to change. The prices in the North Okanagan are still inching down and although that trend is slowing it will not stop and start going the other way until the inventory drops considerably.
My prediction is that will not happen till late next year. What all this says is that this is the time that astute investors buy. I have bought 4 properties in the last 2 months and am still on the prowl for more.
I love it when I hear a novice investor tell me that they don't think the market has bottomed out yet so they are not going to buy. The market may drop another 3 to 5 % and I am buying for 15 to 25% below market value. The reason I can purchase at those prices is that the competition is staying out of the market, waiting for it to "bottom out".
But one thing you always have to remember this is just the world according to Bill.
Broker/Owner Century 21 Executives Realty Vernon BC
OkanaganIvesting.com @ Century 21