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There are many dilemmas facing Real Estate Sellers in Kelowna at the moment. In this latest post, we will explore some of the difficult choices Sellers face and the Spring Real Estate Market Outlook.
Current Dilemmas Facing Real Estate Sellers
1. Higher Inventory and Competition
With around 1,350 active single-family home listings, 700 Condo Listings, and 400 Town Home Listings in Kelowna and the Central Okanagan, inventory levels remain on the high side. Properties that lack standout features, are poorly presented, or are overpriced risk being overlooked, leading to longer days on the market.
What to Do: Focus on your property’s appeal by highlighting features that resonate with buyers, such as views, brightness, proximity to amenities & schools, walkability, or outdoor spaces.
Staging, professional photography, and careful pricing are more critical than ever. Also, ask your Agent for the Absorption Rate Analysis calculation which will tell you your current % chance of Selling. Now is not the time to be overpriced!
2. Interest Rates and Buyer Affordability
Although mortgage rates are expected to ease in 2025 affordability is still a key issue for buyers. High carrying costs and inflationary pressures mean many prospective buyers remain hesitant to make offers.
What Sellers should expect: You must recognize that affordability constraints could limit the pool of qualified buyers, even in a traditionally busier Spring season. While activity is likely to increase next Spring, Buyer budgets may not expand as much as you hope. Understanding this dynamic can help manage your expectations around the final sale price.
3. Seasonal Slowdowns and Uncertainty
Winter traditionally marks a quieter period for the Kelowna Real Estate market, with Spring usually bringing a resurgence of interest. The Kelowna Real Estate Market has also been hit by uncertainties – a weaker Tourist year, the fear of further Wildfires, and the effects of the harsh winter in 2024 which affected the Wine-Growing industry.
What to Expect: This Winter expect fewer showings and extended days on the market. But, remember Winter can still attract motivated buyers, such as those relocating for jobs or students’ families preparing for UBCO’s academic calendar. (See my recent post “Should I stay listed this Winter or Wait until Spring in Kelowna.”) Be patient, but stay proactive in pricing conversations with your Real Estate Agent & prepare for cautious buyers who may negotiate harder on price.
4. Price Stability, Not Growth
Many Sellers are hoping for a Spring price surge, but the reality is that prices are expected to remain stable rather than rise sharply. Economic pressures, continued affordability concerns and an influx of listings will likely cap significant price growth.
Why?
- Higher inventory levels mean Buyers will continue to have more negotiating power.
- Kelowna’s economic challenges, including the tech and tourism sectors, continue to impact buyer confidence.
See my recent post detailing the BCREA Housing Forecast in November 2024, and its numbers for the Kelowna area.
What to Expect: Sellers should temper expectations of dramatic gains and instead focus on the likelihood of steady market activity and a quicker sale timeline.
5. Impact of Regulatory Changes
Government interventions, such as this year’s changes to short-term rental policies and the introduction of affordable housing programs, have had an influence on property values. Condos, in particular, often marketed as investment properties, saw reduced demand as rental regulations became stricter, impacting sellers’ profitability.
What to Expect: As a result of the recent Provincial Election, Kelowna Sellers should prepare for the continued enforcement of stricter short-term rental (STR) regulations. If you do have a Property previously marketed as STR investment you may need to adjust your strategy. Focus on appealing to long-term residential buyers or owner-occupiers. Monitoring local authorities’ implementation and potential further adjustments to these regulations is advisable, as these rules will significantly influence market trends in the coming months.
Dilemmas Facing Real Estate Sellers in Kelowna: Looking Ahead to Spring 2025.
Good News for Sellers Heading Into Spring 2025
- Increased Buyer Activity: Easing mortgage rates and seasonal demand typically boost buyer interest during the spring. This should lead to higher sales volumes for properties. To what level largely depends on what further Interest Rate cuts we see from the Bank of Canada. Links to further info:
- Pent-Up Demand: Buyers who delayed purchasing due to affordability concerns or rate uncertainty may re-enter the market, increasing competition among buyers.
Further Info Link: - Stabilizing Prices: While sharp increases are unlikely, stable prices provide predictability, making it easier for Sellers to plan and negotiate effectively
- Opportunity in Long-Term Rentals: Stricter short-term rental regulations may make some properties more attractive to buyers seeking long-term investment opportunities
Bad News for Sellers Heading Into Spring 2025
- Persistent Affordability Challenges: Despite easing rates, many buyers remain cautious due to high carrying costs and economic uncertainty, potentially limiting the buyer pool.
- Increased Inventory: Elevated inventory levels, especially in condos, could lead to longer selling times and pressure to reduce prices.
- Regulatory Uncertainty: Changes in short-term rental rules may deter investors, particularly in markets like Kelowna where many properties were previously marketed as STRs. Link:
- High Expectations from Buyers: With more options available, buyers may negotiate harder, particularly for homes that require updates or lack standout features. Link:
- Economic Uncertainty: Broader economic factors, such as inflation and slower growth in key sectors like tourism, may dampen overall market activity.
For more insights or to discuss your specific situation, feel free to reach out to me.
Trish Cenci PREC*
Tel 250-864-1707.
