Well, there is so much to talk about with regard to the Kelowna Real Estate Market this month. There are so many opinions flying around out there!
In case you haven’t heard, we have experienced a definite slowdown in the market during the last month.
Buyer fatigue, the new Interest Rate environment (the Bank of Canada raised its overnight policy rate by 0.5 points to 1.5 per cent this morning), inflationary pressures, the impact of Oil prices, the Ukraine War, the volatile equity correction and the Media, have all contributed to Buyers sharply applying the brakes, and many are now sitting on the fence waiting to see what happens next.
This is causing some Seller anxiety as in many cases, showings are much slower, Buyers have more choice and offers are taking longer. The result has been a much higher number of price reductions during May, and more homes selling below the asking price.
Before everyone gets too carried away though, there is currently very little in our ‘fundamentals’ that points to a major Real Estate market correction. While it is true inventory is rising, it is still below average and will take quite some time to increase.
It is more that we’re heading to a balanced market and it will take a little while for the market to find its new normal.
So, now is the time for Sellers to price their homes at realistic levels, Buyers to continue to buy, if they’re planning to stay for at least 3 to 5 years, and for both parties to be prepared to negotiate!!
In the new-build sector, I have to heard of Developers adding Contract clauses to potentially increase prices to cover cost-overruns, and even the occasional project going on ‘pause’.
Kelowna & Central Okanagan Real Estate Sales May 2022.
May 2022 Real Estate sales numbers continued to show a downward trend.
Compared to the last month-:
– Total Sales were down 4.3% last month.
– Single-Family home sales were down 5.7%.
– Strata sales down 3.7%
Compared to last year -:
– Overall sales were down 29.1%
– Single-Family Home sales were down 31.5%.
– Strata sales were down 28.1%.
Inventory Levels May 2022
Inventory levels continue to rise.
Total listings in the Central Okanagan are now 1853 up from 1554 last month and up from 1,475 last year.
Single Family & Bare Land Strata Residential 861 units up from 701 last month and up from 525 last year. An increase of about 68% on this time last year.
Condo – 306 up from 284 units last month and down from 339 last year.
Town Homes – 215 up from 179 last month and up from 164 last year.
Median Real Estate Prices – May 2022
Single Family Homes & Bare Land Strata
May 2022 $1,065,500 April 2022 $1,100,000 2021 $899,400 – has been on a downward trend since March 2022 when it peaked at $1,151,000. The median price is down 7.4% since March.
May 2022 $485,500 April 2022 $493,750 2021 $405,000 – Peak was March 2022 $520,000. The median price is down 6.6% since March.
May 2022 $715,000 April 2022 775,000 2021 $632,500 – Peak was March $786,000. the median price is down 9% since March.
Points to watch in the Kelowna Real Estate Market.
1. Inventory – Inventory levels continue to rise and we are heading towards a balanced market, which will take time. This is why we are seeing things slower, as Buyers and Sellers ‘feel their way’ through this new territory. So when we see prices adjusting this is just an adaption of the market not ‘the sky is falling’, and will be much healthier for the market overall.
2. Interest Rates – The Bank of Canada raised its overnight policy rate by 0.5 points to 1.5 per cent, today. While this is already having an effect on the Housing Market, Consumer Spending is still strong, so we should expect rates to continue to rise, the predictions being by up to 1%, so, Buyers need to budget accordingly & also to re-visit financing pre-approval levels.
3. Behavioural Economics – May come into play i.e.the emotions of fear and greed may cause people to sell, as seen in the equities markets.
4. Current Reality – Sales numbers are falling, homes are taking longer to sell, low-ball offers will happen, people are negotiating, and interest rates are going to continue to rise, but overall inventory is still below average and the economic indicators show we are not heading into a potential recession for some time yet.
5. Prices appear to have peaked for now – Median prices peaked in March 2022, so Sellers need to come to terms with this. Correct pricing & making their properties as appealing as possible has become even more important. For Buyers, by all means, negotiate but be prepared for a ‘frosty response’ if you offer too low, as we’re heading to a balanced market, not a Buyer’s Market.
This month’s photo – Kalamoir Park, West Kelowna.