We’re back with another exciting edition of Kelowna Real Estate Market News! This month, we’ve seen some really interesting, maybe even crazy, things happening with the real estate market. Perhaps it’s the domino effect from recent mortgage changes or maybe the region just had a bad month, but there are definitely some things that we will be keeping an eye on in March.
There’s some good news, bad news happening with listings in February, but the big news is that inventory for single-family homes is up substantially while sales plummeted last month. In fact, single-family home sales are down 27.37% compared to 2017, and 56.6% compared to the previous month! On the flipside, sales of condos were very strong in February, up a total of 28 units or 33.73% compared to the previous year.
The B.C. Speculation Tax
Like many others in the industry, we are quite concerned about the speculation tax in B.C., recently announced by the NDP government. We have already received calls from clients who are looking to sell their vacation and investment properties in the region, which may cause a dramatic decline in property values as the supply increases sharply.
Unfortunately, many of the homeowners we are hearing from are not ‘speculators’ as much as they are investors in the local economy. In a city that is heavily reliant on tourism, it is reasonable to think that there will be a proportion of properties in the area that are owned by those whose primary residence is elsewhere. But we look forward to those additional people, and their wallets, each summer as it is that influx of activity that helps sustain many a small business for the rest of the year.
The fact remains that Kelowna and the communities around it would likely not have the quality and depth of amenities were it not for tourists and homeowners with vacation properties. We agree that something needs to be done to help stem the sharp rise in home prices, but this tax is certainly not the solution.
As Kelowna Realtors, we will continue to follow the market trends and changes to taxes and mortgage rules carefully. We are then able to use this knowledge for our clients, helping them navigate the Kelowna real estate market as they buy and sell homes in the area.
Give our team a call at 250-764-4344 and we can walk you through the buying and selling process!
Real Estate Listings
Last month saw a small increase in the number of listings hitting the market. We expect this number to start rising a bit higher as Daylight Savings Time takes effect soon and the warmer days finally arrive. As it stands now, there was only a 6% increase in the number of listings coming on the market in February, but the majority of that was carried by the strong showings in multi-family properties.
Monthly Listings by Price – February 2018
New Residential Listings
The total number of new listings coming on the market was 648 in February, which is 6.4% higher than the 609 homes listed in February 2017. But there’s more to that number than meets the eye as single-family home listings were down more than 3%, falling from 293 homes in February 2017 to 284 last month. The strong listing numbers for townhomes and duplexes is what made the difference!
Active Residential Listings
Inventory is up both year-over-year and month-to-month. In January, there were 1,295 homes on the market and that number climbed to 1,424 last month. For context, in February 2017, there were 1,320 active residential listings on the market, so that number has risen 7.88% when compared to the previous year.
While listings for single-family homes in Kelowna may have dipped, inventory is definitely stronger than it was in 2017. In February, there were 680 homes on the market, which is 22.08% higher than the 557 homes in February 2017.
Real Estate Sales
We were anticipating a change in numbers after the new mortgage rules came into effect in January, but that didn’t happen. Perhaps the market is seeing a delayed reaction because sales for single-family homes in February were down a whopping 27.37% compared to last year and there were 180 fewer sales when comparing January and February. That’s a 56.6% difference in the number of sales!
Overall sales for all residential property types dropped 6.27%, thanks in large part to the strong performance of condos. Sales of apartment-style condos in Kelowna area were up 33.73%, jumping from 83 units in 2017 to 111 units sold in February 2018.
Monthly Sales by Price – February 2018
Residential Property Sales
Sales of single-family homes fell from 190 sales in February 2017 to just 138 sales last month. That puts the ratio of sales to inventory for residential homes at just 20.29%, which the BCREA considers a ‘balanced market’. Of course, one month doesn’t make a trend, but this is certainly worth noting and keeping an eye on.
Days On Market
In February, properties appeared to be moving more quickly again. This was a bit of a change from our January real estate market report, when homes were sitting around 14% longer than the previous year. But February is a shorter month, by 2-3 days, so that may account for some differences as people like to make offers and finish deals within a tidy timeframe.
What’s particularly interesting is the demand for townhomes. As you can see from the chart below, townhomes are being snapped up very quickly. And just take a look at what’s happening with waterfront properties!
|Days on Market|
|Property Type||Feb. 2018||Feb. 2017||Percentage Difference|
|Condo – Apartments||54||55||-1.4%|
The total average for all residential homes is 58 days on market, which is a few days less than in February 2017.
Real Estate Inventory
Real estate inventory has been on the up for the past several months. With the recent provincial budget and news of a big tax increase for “foreign” homeowners, we may see a big increase in inventory over the next couple of months as our Albertan neighbours and other out-of-towners look to offload their properties.
3-Year Inventory of Active Single-Family Residential*
*includes Waterfront properties
February inventory levels for residential real estate climbed 7.88% over the previous year, including everything from acreages to condos and waterfront property. As you can see in the chart below, single-family homes and waterfront homes have seen the biggest gains, but we can expect more activity in condo properties in the coming months.
|Property Type||Dec. 2017||Dec. 2016||Percentage Difference|
|All Residential Properties||1,424||1,320||7.88%|
|Condo – Apartments||305||301||1.33%|
|Waterfront Single-Family Homes||60||50||20%|
Kelowna Real Estate Prices
Well, the average price of a home in Kelowna has once again risen when comparing year-to-year data, which is to be expected as we head into Spring. If anything, it’s interesting that it hasn’t risen more. It actually dropped slightly since last month!
Kelowna Home Prices – Single Family Residential Average
The average price of a residential property in Kelowna, including condos, townhomes, and mobile homes, was $534,067, only up 1.41% from $526,634 in February 2017. But what’s more interesting is that the average home price dropped 2.27% from January to February. In the previous month, the average home price was $546,463.
Average List Price
The average price of a single-family home dropped slightly from January to February, falling 3.12% from $699,352 to $678,156. With that said, home prices are still up when comparing year-to-year averages. In February 2017, the average single-family home price was $638,447 and that number has jumped 6.22% to $678,156 last month.
So, what does this mean? Demand for Kelowna real estate is still strong, but there is more inventory and less sales activity. Perhaps recent changes to mortgage rules are impacting home prices. The provincial government’s proposed speculation tax may have an affect on the market in the coming months too, so we will be keeping a close eye on that.
If you’re planning on listing your home this year, be sure to choose a Realtor who is knowledgeable about potential changes to the market and is prepared to be honest with you. A higher listing price or promise of a quick sale isn’t necessarily in your best interest. Pricing real estate is a balancing act and it requires careful analysis of patterns within your area and familiarity with external forces that can impact home prices and sales.
*Unless otherwise noted, all stats are for February 2018 compared to February 2017 and cover the Central Okanagan region. Statistics are provided by the Okanagan Mainline Real Estate Board.