Did you know that the Real Estate Market is predictable?
Some people may stop reading after the title thinking their Realtor is truly confused. However, there are 2 major factors that help us predict the Real Estate market. First, the Real Estate market changes very slowly. The Okanagan, Shuswap housing market started its correction in the first or second quarter of 2008. It started to level off in the first quarter of 2012 and started to rise again in 2014. That is 7 years to go through the correction leg of the cycle and start to recover again. The Stock Market can go through this transition in 3 weeks. Second, the Real Estate market is extremely local. In the Okanagan and Shuswap areas, although they are somewhat related, we can have different markets in Salmon Arm, Vernon and Kelowna, each changing at a different pace or in different directions. These 2 factors allow us to separate the 5 statistics that allow us to predict the flow of the Real Estate market within about a 2 year window with reasonable accuracy. These statistics are the inventory, the absorption, the sales activity, the days on the market to sell, and of course the prices. Because the market moves slowly we can see the inventory, absorption and days on the market changing 6 to 24 months before the sales activity and prices begin to change. It is like dominos, in order to predict the moment the last domino will fall you simply have to notice when the first domino falls. Right now, the inventory is falling, the absorption is rising, the days on the market to sell is shortening and therefore for the time being the prices and activity will continue to rise. Translation....it is a great time to buy.
Prices are Changing in the Right Direction
In July 2014 sales are up again in all three zones compared to July of 2013. Year to Date sales are up in the North Okanagan, the Central Okanagan and the Shuswap, 42%, 15% and 5.5% consecutively. Median prices are up 2% in the North, 10% in the Central and 5% in the Shuswap compared to July of 2013. We must keep in mind that prices are the toughest statistics to portray accurately. Comparing a month this year with the same month last year does not tell the whole story. However, it does tell us that prices are changing and in the right direction.
* Okanagan Real Estate Newsletter