THE OKANAGAN’S EVER CHANGING REAL ESTATE LANDSCAPE
It is not a false rumor that 2014 saw a significant shift in real estate in the Central Okanagan midway through the year. The shift from a Buyer’s market to a Balanced market, combined with record breaking monthly statistics the likes of which have not been seen since the peak of the market back in 2007/08 was a welcome sign of optimism for the local real estate market.
In December 2014, the Okanagan Mainline Real Estate Board reported “The 7,584 residential sales for 2014 are the highest on record since 2007 when 8,702 transactions were reported. The price of single family homes is steady and strong in most areas with modest gains seen in some locations where supply has tightened.”
After years of a sluggish recovery, realtors are once again engaging in competing bid situations (more than one buyer makes an offer on a home at the same time); quick sales (firm and binding within 2-4 weeks of being listed); and back-up offers (an offer accepted in second position should the first offer not become firm and binding). Also confirming a solid recovery in real estate is a higher absorption rate (rate at which available homes are sold in a specific area during a specific time period) and consumer demand stronger than we have seen in over 7 years.
Monthly sales for January 2015 were not surprisingly 6.6% lower than January 2014. This is understandable given the fact that we saw a 45 year record breaking snowfall that brought our City to a standstill, so these statistics are not accurate compared to what they might have been under normal circumstances. Scheduled property showings were cancelled, travel plans were thwarted and contract writing took a ‘pause’ while residents dug themselves out and waited for the roads to clear and schools to reopen. So we are actually comparing 4 weeks of activity in January 2014 to only 3 weeks of activity in January of this year.
HOWEVER….February saw a huge increase in statistics. The Okanagan Valley real estate market made headlines in the news! Total residential sales were up 45.2% over last year with single-family homes recording an astounding 67.6% increase!
Will the resulting decrease in oil/gas prices and the loss of jobs in the Northern Alberta oil sands be detrimental to our local real estate market? It is a possibility that only time will reveal as approximately 18% of sales in the Central Okanagan in 2014 were made by Alberta Buyers*. The consensus however, is that the Kelowna market will remain stable in 2015 as the Canada-wide desire to enjoy our coveted four-season lifestyle strengthens every year. This growing demand combined with increasing consumer confidence, historically low interests rates, an increase in job growth and considerable City commitments regarding local infrastructure will provide strong support to our local real estate market.
For now there is no indication in our statistics that this year will be anything but as good as or better than 2014!
Happy House Hunting!
*OMREB’s YTD statistics – Dec 2014