For pretty much all of 2017, every Okanagan real estate headline announced a hot market. But that started to change a few months ago and this past month we have seen the strongest signs of a cooling market yet. In fact, the sell to inventory ratio for single-family homes in September was 20.08% which indicates a balanced market according to the BCREA’s standards.
That’s right, we are technically in a balanced market now! Of course, if it sounds too good to be true, it probably is, and the BCREA defines a balanced market as one with a Market Absorption Rate of between 14% – 21%. So, we are just barely in a balanced market and even then it’s only for single-family homes. Townhouses and condos currently have rates of 31.4% and 35.88% respectively. Still, we will take the good news where we can find it and this is very good news, indeed.
The hot real estate market was a fantastic boon for investors and those looking to downsize, but for nearly everyone else it was stressful. Homes were selling faster than the sellers could buy and first-time homebuyers found the prices rising so dramatically that plans were changing on a weekly basis. At Walker Real Estate, we will be very happy to see a balanced market and are hoping for a bit of a cooling period in the Kelowna area.
Real Estate Listings
If you’ve been wanting to make a move up, now might be a good time. Home prices are remaining stable, so you should be able to get a fair price for your home. However, with increased inventory levels and a drop in sales, you may also have more options when it comes to finding your next home and you may even have an opportunity to negotiate on price or terms.
New Residential Listings
The number of new residential listings in September remained steady with 755 new listings, compared to 754 new listings in September 2016. That said, single family home listings are up 2.93% from 375 to 386.
Active Residential Listings
The number of active listings has dramatically increased 1,688 in September 2016 to 1,924 in September 2017. That’s an increase of nearly 14% for inventory levels.
Monthly Listings by Price – September 2017
Note the number of new listings priced at $600k and higher…
Real Estate Sales
While the Kelowna real estate market hasn’t exactly cooled off, it may be cooling down. For the past few months, we’ve been seeing signs that the market may be balancing out a bit with increased listings and inventory and a decrease in home sales. The month of September was no different and the incredible decline in sales may be the strongest sign of a market correction yet.
Residential Property Sales
The Central Okanagan saw just 448 residential homes sold last month, which is a 23.29% decrease from the 584 homes sold in September 2016.
The most dramatic numbers, however, belong to the single-family home category. There was a 30% decrease in the number of single-family homes sold in September 2017 vs. September 2016, falling from 276 sales to just 193.
Monthly Sales by Price – September 2017
Note the number of sales at $600k and higher… Can we expect price drops?
Days On Market
We are now starting to see an increase in the number of days on market too, further signalling a cooling real estate market in Kelowna. In September 2017, it took an average of 53 days to sell a residential property whereas it took 51 days to sell a property in September 2016.
Again we are seeing some interesting numbers for the single-family homes in particular, which took 16.22% longer to sell, increasing to 49 days from 42 in the same time period last year.
Real Estate Inventory
For the tenth month in a row, single-family residential real estate inventory in the Central Okanagan has increased. Between October 2015 and August 2017, inventory didn’t manage to crack the 1,000 mark, but in September inventory hit 1,033 and improved slightly on August’s 1,023 active homes.
Typically, we see a drop in the number of homes listed in the second half of the year, but again we are seeing an increase in listings. Of course, as we approach the colder months, we can expect that the number of new listings will drop.
3-Year Inventory of Active Single-Family Residential
Current Real Estate Inventory
By the end of September, there were 1,924 active residential listings which represent a strong increase in inventory levels.
But again the most exciting number comes from single-family homes. At the end of last month, single-family homes accounted for 961 residential listings on the market, which is a 30% increase over 2016 levels for the same time period!
Kelowna Real Estate Prices
The average home price has once again climbed over the $700,000 mark, but are buyers going to purchase? If the current statistics are anything to go by (and they are), pricing your home well is going to be very important if you truly wish to sell. Buyers should know that there are deals to be had if you’re willing to make some compromises and work with a Realtor who is keyed into the local market.
Average List Price
The average price of all residential listings, including condos, townhomes, single-family homes and manufactured homes, is $560,669.
The average list price for a single-family residential home has once again climbed above the $700,000 mark. The average list price of a home in September was $710,578 which is a 14.05% increase from September 2016 prices.
Single Family Residential Average Prices
Why the big increase in home prices again? It could be that homeowners at the upper end of the market are concerned about a levelling market and have decided to cash out now, but it could also be a sign that homeowners, in general, are requesting higher asking prices for their homes. This is a decision that should be made with the help of a reputable Realtor who has a fiduciary responsibility to ensure your best interests. While a high list price might seem like a good idea, it may also lead to more days on market or to fewer offers.
*Unless otherwise noted, all stats are for September 2017 compared to September 2016 and cover the Central Okanagan region. Statistics are provided by the Okanagan Mainline Real Estate Board.