After a very quiet start to January, which followed a quiet December, I am pleased to report that Buyers and Sellers are beginning to think about Real Estate again. We are beginning to see more new listings and Buyers are out looking.
Speculation Tax in Kelowna and West Kelowna seems to be here to stay, for now, so its time to get your Speculation Tax Declarations in!
Kelowna & Central Okanagan Real Estate Sales January 2019.
Total sales were roughly on par with last month although down 42% on this time last year. Single Family home sales were down 45% on last year and Strata sales were down 37%, which is an even higher drop than last month.
This is certainly depressing reading for Sellers, but putting a positive spin on it, it can only get better!!
Total levels of Inventory are rising, currently standing at 2,449 Residential units for sale in the Central Okanagan (as at January 31 2019), which is up nearly 49% up from this time last year, which is significant. If this continues without a rise in sales, we will continue to see prices 'soften'
Breaking this down into categories -:
Homes 2019 1068 2018 831 Sales 88 Months Supply 12 Buyers Market
Condos 2019 491 2018 349 Sales 60 Months Supply 8 Buyers Market
Town Homes 2019 341 2018 258 Sales 33 Months Supply 10 Buyers Market
While the market as a whole is definitely a Buyers Market, there are still pockets where inventory is tight and it is a Sellers Market.
For instance in the $400,000 to $550,000 range, for Single Family Homes in Rutland, which are popular with Working Families, there are 25 currently active, 6 sold this month and there is only 4 months supply. This is still a Sellers Market, particularly for well presented properties.
I have recent experience of this where I was listing a Home, it had a good offer right away and was sold within 9 days!
What next for the Kelowna Real Estate Market?
There are a lot of factors in play at the moment. Here are some of them -:
- First-Time Buyers & Borrowers, in general, are still being affected by the Mortgage Stress Test, but we need to remember that only affects Banks, not Credit Unions and Private Lenders.
- Speculation Tax - first bills will be payable this July. There are a number of exemptions, so check out the Government website https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax and speak to your Tax Consultant.
(Remember it only affects Kelowna and West Kelowna and, for example, does not affect properties on First Nations Land or in Lake Country.)
Consumer Confidence - Some Buyers are concerned that prices are going to continue to soften, so may hold off buying. I don't think this is going to affect local Buyers decision as much as Investors. Some Investors may decide to cash out thinking we are now passed the top of the Market.
- Spring May come early - we have been experiencing a mild winter in the Okanagan this year, so there is a high possibility that spring will come early this year, which may bring out more buyers earlier than usual.
- Sellers may decide to wait - I am already seeing evidence of some Sellers deciding to 'hold off' on Selling as the Market has adjusted more than they are comfortable with. In some cases, Sellers are looking at their 2019 BC Assessment values which are less than Current Market values, and they just can't get their heads around it as they are not used to it.
- National & International Economy - Trade Wars, Brexit Votes, Lower Oil Prices, concerns about Interest Rates, lower Economic Growth in Canada, may all play its part. The good news is the Economic Forecasts for BC seem reasonably healthy.
Things to watch
- I will be watching inventory levels.
- My sense is Buyers will again have set limits on what they can afford, so sales at the lower price-point of each part of the market are likely to be brisker that at the higher end.
- For Sellers, making sure any property you are Selling shines. The presentation will be everything!
As always, if you have any specific questions about your Buying and Selling needs please feel free to call or email me!