For the second month in a row, we are seeing home prices in the Central Okanagan cool down – if only marginally. After a couple of scary months above the $700,000 mark, the average single family residential price has slid back down to $676,000.
Single Family Residential Average Prices
If you’ve been wanting to make a move into the Kelowna real estate market, you’ll also be happy to hear that we are now seeing our highest inventory levels since October 2015! This is the third month in a row that we’ve seen inventory levels climb higher than 2016 figures and we’re hopeful that this leads to a cooling of the hot Kelowna real estate market.
August 2017 vs. August 2016
The total number of units sold is down dramatically from 754 in August 2016 to 590 in August 2017. That’s a 21.75% decrease in unit sales encompassing both commercial and residential sales. But if you’re thinking that the commercial real estate numbers are dragging the statistics down, you’d be wrong…
The total number of residential units sold in the Central Okanagan is down 24.09%, from 303 to 230.
Single Family Monthly Sales by Price
Why are sales down so much? We can’t really say with absolute certainty, but we think that the following may be contributing factors:
- The Smokanagan effect led to fewer visitors and perhaps fewer buyers looking to relocated to Kelowna or purchase a vacation home here.
- Changing interest rates may lead to a more cautious real estate market as homeowners look to avoid unexpected mortgage hikes.
- Political uncertainty (globally, nationally, and provincially) generally causes homeowners to become more cautious and stay the course rather than taking a step up the property ladder.
- Rising prices can lead homeowners at the affordable end of the market to avoid “moving up”, reducing the inventory that typically appeals to first-time homebuyers and downsizers. This becomes it’s own self-perpetuating cycle until more inventory is created.
As mentioned above, we are starting to see an increase in the amount of available inventory. This may be because homeowners are trying to sell before the market balances out due to rising interest rates and changes to mortgage rules. If the rules of supply and demand hold true, we may see a further reduction on home prices in coming months.
At the end of August 2017, there were 958 active single family residential listings, which is a 25.72% increase from the 762 listings in 2016.
3-Year Inventory of Active Single Family Residential
The number of Single Family Residential listings was up 10.24%, from 420 in August 2016 to 463 in 2017.
Year to Date – 2017 vs. 2016
We’ve almost caught up to last year’s total number of new residential listings with 6,692 total listings so far this year. By the end of August 2016, the Central Okanagan had seen 6,757 listings, so we are just 0.96% shy of 2016’s numbers.
While our total listings are almost on par with 2016 figures, the total number of residential sales is down 14.56% from 4,918 in 2016 to 4,202 by the end of August 2017.
Single Family Residential
The total number of residential listings may be strong, but single family residential listings are down 21.02%, from 2,422 by the end of August 2016 to 1,913 this year.
The rules of supply and demand are beautifully illustrated by the Kelowna real estate market. 3,396 single-family homes were sold by the end of August last year. This year, that figure is down 2.83% to 3,300. But the 21% decrease in listings has caused home prices to skyrocket in the Kelowna area.
Single Family Listings by Price, Year-to-Date
Last year, the average price of a single family home in the Central Okanagan had climbed to $591,334. Earlier this summer, that number had climbed above $700,000 though it has since come down to $676,371. That’s a 14.38% increase in the average single-family home price.
If you have questions about the Kelowna real estate market and buying or selling a home in Kelowna, give the team at Walker Real Estate a call at 250-764-4344 or send us a message today!