First and foremost Happy New Year everyone!
In this months report, it's time to reflect on the last year in our Kelowna Real Estate Market and look ahead to what we may expect in 2019.
December was a difficult month for Sellers, as both showing numbers and Buyer activity was very subdued.
Kelowna & Central Okanagan Real Estate Sales numbers.
The graphic above shows the monthly Kelowna & Central Okanagan Real Estate sales over the last 9 years and highlights the dramatic change in the Market from the highs of 2016 and 2017.
The year started on the kind of trajectory we had been expecting, but gradually, as the changes to Mortgage Stress Tests started to bite around May and affordability became more of a problem, sales have dipped to their lowest level since 2012.
Total sales were 34% down on this time last month and 42% on this time last year. Single Family home sales were down 42% on last year and Strata sales were down 37%.
While inventory levels are rising, from the lows of 2016-2017, they are in the middle of the range we have seen over the last 10 years.
Median Price Trends
Single Family Homes
Single Family Home prices started to fall during the year, but have evened off with the current Median Sale price being $635,000.
Townhomes prices did soften during the course of 2018 and has now recovered a little. the current Median Sale price is $485,000.
The median sale price of condos has shown the most dramatic fall, and now stands at $287,500. Interestingly if we compare it year on year the overall median price has increased from $305,000 in 2017 to $328,000 in 2018.
Forecast for Kelowna Real Estate 2019
The start of 2019 is likely to be much the same as the end of 2018. Sales activity is likely to be slow, reflecting Consumer confidence levels and Buyers wanting to 'sit on the fence' waiting to see if prices continue to fall.
The BC Governments Speculation Tax is now a reality for Kelowna and West Kelowna, which will cause some owners of 2nd Homes to think about selling in the spring.
We are going to see a Provincial By Election in Nanaimo in the next month, which could change the makeup of the B.C. Legislature. If the Liberals win, they will have 43 seats, the NDP 40, the Greens 3 and independent Speaker will then be required to break ties, but it is not likely to trigger a full Provincial Election, so it looks like Speculation Tax is here to stay for now.
Much of the Condo construction that we have been seeing over the last couple of years is due to be completed, so we should see more properties available for sale and rent, which will provide more choice for buyers & ease the pressure on the rental market.
At this stage, we are not looking at the over-supply of condos that we saw around 2008, but pricing is likely to be more competitive.
One of the areas, of the Kelowna Real Estate Market that I am watching closely, is the price of a single-family home for a working family. With the change in the Mortgage lending rules and the rising prices, these properties went 'out of reach' for many families. If prices do continue to fall and interest rates hold steady we may see some 'pent-up' demand which could then be the trigger for sales in other parts of the market.
The Vancouver and Lower Mainland Real Estate Markets are also on the radar. As their markets stalled last year, so did the migration of families 'cashing-out' and moving to the more affordable Central Okanagan. An uptick in these markets may also be the catalyst for more sales activity in our area.
In summary, if you are a Seller, you need to prepare to be mentally tough and realistic about the Market as activity is likely to be slow. For Buyers make sure you qualify yourself before you head out with your Real Estate Agent and when you find the right home don't be afraid to negotiate.