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Welcome to the Kelowna Real Estate Market November Report. I can’t believe I am writing in November already, but as I look out the window, we have snow on the hills!
October 2024 saw quite an uptick in sales compared to September. This was especially so for Single-Family Homes and Town Homes.
The most interesting item of note is that despite persistent higher inventory, Sellers are holding firm on pricing. The result is, that we have only seen modest slippage in the Median Sales prices of late.
Here’s a detailed look at October’s numbers for single-family homes, condos, and townhomes.
Single-Family Homes: Sales Up & Prices down modestly.
- Sales: 186 homes sold—up by 52.5% from September 2024 122 and up from 119 in October 2023.
- Median Price: $945,000, down only 1.1% from $955,000 last October and down from $957,750 last month.
- Inventory: 1,658 homes, down 12% from last month’s 1,885 units, but a significant 18.6% jump from 1,398 in October 2023.
Sales of single-family homes saw a big lift from last month. I merely see this as a bounce-back from the lower numbers in September, rather than the Bank of Canada interest rate making Buyers jump in. Sellers are digging in on their price, which hasn’t shifted much from last year, leaving the buyers, who were hoping for a further price drop, increasingly looking like they’re going to be out of luck.
Condos: Sales Up & Prices Down.
- Sales: 93 units, up 13.4% from last month, and up 22.4% from 119 units in October 2023.
- Median Price: $442,500, a more notable 9.5% dip from $489,000 last year.
- Inventory: 719 condos, up 3.6% from 694 last month & up 28.2% from 561 in October 2023.
Condos sales did not bounce back as solidly as other sectors last month & prices have dropped more here than in other sectors. The rising days-on-market figure suggests buyers are cautiously weighing their options, but any significant price drops are becoming less likely as Sellers ‘dig-in’. There is some concern that there are a number of new projects due to be completed soon which could potentially add to inventory, especially following this years change to the short-term rental rules.
Townhomes: Sales & Prices Up
- Sales: 58 units, a strong 48.7% bounce-back from last month & 31.8% increase over last year’s 44.
- Median Price: $679,000, down just 3.5% from October 2023’s $702,450. and up from $662,500 last month.
- Inventory: 429 units, a substantial 30.4% increase from last year’s 329 units, but down from 449 last month.
Townhomes also saw a sizable increase in sales from last month, with median prices staying largely stable, suggesting Sellers in this segment, too, are committed to holding firm. With properties in this price range, more in line with most Buyers’ affordability budgets, those eyeing further declines may need to rethink, as October’s numbers point to a more stabilised market.
Factors Affecting the Kelowna Real Estate Market in October 2024
The Kelowna Real Estate Market continues to face many different challenges.
- Seller Motivation: Sellers who are not facing financial pressures are holding firm on their prices. With financial forecasts indicating potential interest rate cuts, it’s only a matter of time before more buyers can re-enter the market.& drive up demand. Whereas Buyers are hoping prices will Fall further. Currently, prices remain 40-60% above pre-pandemic levels, despite a 10-15% decline from recent highs, according to the Association of Interior Realtors Q3 2024 Report. This situation has led to an impasse in the market.
- Persistent Higher Inventory levels: Although inventory levels for single-family homes and townhomes have begun to decline, we haven’t experienced such high levels since 2014. In the coming weeks, I anticipate further reductions as some discouraged Sellers grapple with the decision of whether to keep their properties on the market through the winter. (Watch out for my upcoming Blog post).
- Demand Disparities: There is a growing demand for properties priced under $700,000, leading to multiple offer situations in some cases. In contrast, higher-priced listings are experiencing slower activity, often because potential buyers cannot sell their current homes.
- Developer Challenges: Higher Financing costs and new Building and Energy Codes have been a significant dampener to new developments. It will be interesting to see whether this changes following the recent interest rate cuts. Interestingly, last week it was reported by Castanet that the 33-storey mix-use Tower planned by Victor Projects & the Mission Group will be going to a Public Hearing, at City Hall, on November 5, 2024, after an 18-month pause. Post note Nov 6, 2024– This project has now been given the green-light by Council
- Tourism Impact: A drop in Tourism in 2024, driven by Consumer spending pressures, Wildfire concerns, the new Short-Term Rental restrictions, and the Speculation Tax have all helped to dampen Investment Real Estate sales in Kelowna, as fewer people have decided to Buy a 2nd property this year. (See my recent post talking about What you need to know before Buying a 2nd Home in Kelowna.) This is likely to continue to affect the Market unless the Provincial Government can be persuaded to make some concessions to their current legislation.
- Interest Rate Cuts: The recent 0.5% rate cut has spurred more buyer inquiries, however, it remains to be seen whether this is sufficient to bring Buyers off the fence. My feeling is that it will not, and we will need to see rates come down further. It may therefore be next Spring before affordability concerns start to ease.
- Government Announcement aimed at increasing affordability. Starting December 15, 2024, the Canadian government is introducing major changes aimed at improving homeownership affordability for first-time buyers and purchasers of new builds. The new policy will extend 30-year amortization periods to these buyers, providing much-needed monthly payment relief. Additionally, the government is increasing the price cap for insured mortgages from $1 million to $1.5 million, allowing more buyers to qualify for insurance with down payments as low as 5%, significantly lowering the initial financial barrier for purchasing homes in expensive areas.
- Has Kelowna Real Estate prices reached the bottom? Signs indicate that the more affordable segments of the Kelowna market may have reached their bottom. While there will always be a few motivated Sellers, many are now digging in. They are banking on a stronger market, as we head into Spring, as further interest rate reductions are widely forecasted. This is a logical conclusion, however, I do have a word of caution for Sellers. While Real Estate prices may see some uptick as seasonal activity picks up, an immediate rise isn’t guaranteed. Interest rates remain slightly elevated compared to recent history, and with higher living costs, affordability for some Buyers will remain tenuous. For now, a period of price stability seems the most probable outlook, with the potential for moderate gains if pent-up buyer demand emerges alongside easing rate conditions. The more affordable homes and homes with ‘Mortgage-helpers’ are likely to see some of the biggest demand.
Other Real Estate Links
BC Real Estate Association October 2024 report
Trish’s Real Estate Listings
This month’s Photo – October Sunset over Lake Okanagan looking towards the Bridge.
