The weather in Kelowna and Central Okanagan Valley has been unseasonal cool the past few week; the same can not be said for the local real estate market! The month of July proved to be the strongest month for sales so far this year, not only experiencing an uptick of 13.3% over last month but logging 18% more sales than July 2018. In fact, with 511 residential sales transactions, July saw the most sales in a month in nearly 2 years, since August 2017. The year started out much of the noise out there being negative, prices were down, sales were down, and the media was hyping it up. Year-to-date, sales are now down just under 10% from 2018 and values appear to be among the highest they’ve ever been. With 5 months left to go in 2019, we could easily see this year’s sales surpass that of last year’s.
The Kelowna and Central Okanagan Valley real estate market experienced another solid month of sales and new listings in what continues to be relatively balanced market overall. As usual for our market, sales were less than they were last month, nonetheless, we saw 451 residential sales recorded. This figure is also again down only slightly from last year as well but to a much lesser extent then the first 4 months of the year. Now halfway through the year, we’ve seen a total of 2183 sales compared to the 2540 sales in the first half of 2018. While this equates to 14% fewer sales year-to-date compared to last, I still describe this as a solid month because of how it compares to recent history; down only 6% from the 10-year average and having outperformed the 5-year period from 2009-2013.
It’s official! May 2019 was the first month to see stronger year-over-year sales after 15 months of slower sales. With 509 sales compared to 504 last year, we’re up 1%! May is also up 20% over April. The Kelowna and Central Okanagan Valley real estate market is continuing to prove this place is pin on the map that people want to call home. Overall the market shows to be relatively balanced, however, if you look closely you’ll see that in reality there are two divergent sub-markets; one is a buyer’s market and the other a seller’s market.
April was the busiest month since October of last year for condo sales in Kelowna and the Central Okanagan with 100 reported transactions. Even with more inventory than we’ve seen since July 2015, the market has returned from the wintery buyer’s market to a bustling, more balanced, spring market. This solid demand for Kelowna condos is driving a continuing increase in property values for the segment, with valuations up 13% since April 2018! The average selling price of a Kelowna condo in April was $409,629.
Last month I talked about Spring’s arrival; April couldn’t have followed suit any better when it comes to the Kelowna and Central Okanagan Valley real estate market. Where last spring we saw a shift from a seller’s market to a balanced market (and eventually a buyer’s market in the fall and winter), this year we are seeing a shift from a buyer’s market back to a seller’s market.
Spring is in the air and we are starting to see its effects in Real Estate too. Kelowna and the Central Okanagan Valley are experiencing a real estate market unlike any we’ve seen in the past decade. It’s predominantly a buyer’s market with pockets that are more balanced. In the coming days and weeks you’ll hear from news outlets and other local Realtors® that the Kelowna real estate market is down again but what they may not tell you is that sales are actually up nearly 30% from February!
Kelowna and the Central Okanagan Valley are experiencing an ongoing slowing of the real estate market, mind you while also experiencing a slowing of the slowing. Sales were down 12.7% from last month which is typical for the time of year, and down just 18.75% compared to September of 2017.
The real estate market in Kelowna and the Central Okanagan Valley saw the first drop in valuation since last winter, erasing all gains it made last month. In the last issue of The Pulse, I predicted volatile pricing and this may very well be the beginning of an uncertain period. The single family residential homes segment of the market has seen a shift from a seller’s market last year to a balanced market this spring and now to the beginning of a buyers market. The first buyer’s market Kelowna has seen in years! With this being said, the condominium and townhouse segments of the market remain in a balanced state for now.
Of the 34 Central Okanagan neighbourhoods, Dilworth Mountain is the last to be holding on a seller’s market for single family residential homes with only 2.67 months of inventory. Neighbourhoods experiencing a balanced market are Clifton, Glenmore, Glenmore Highlands (Wilden), Rutland, Gellately, Glenrosa, and Winfield. The other 25 neighbourhoods have all begun to experience buyer’s markets with between 6.07 - 26 months of inventory. Glenmore, Rutland, and Kelowna North/University District are experiencing seller’s markets for condos with 1.82, 3.0, and 3.24 months of inventory, respectively. For townhouses, 6 neighbourhoods are experiencing seller’s markets.
August saw a total of 417 residential sales and ended with a current inventory of 2603 or 6.24 months of inventory. Overall, sales were down 3.7% compared to last month and 23% over this month last year - a figure that’s actually stronger than we saw in the spring months - and inventory only increased 1.28% from last month. Unlike in the spring market where listings were selling at a fairly unchanged pace compared to last year, August slowed exponentially with average days to sell now at 62 days compared to 47 this time last year.
Back to valuation: based on selling prices, the average valuation of residential properties dropped by 11.36% over last month to $568,210. This decrease was lead by single family residential homes which saw average valuation drop by 12.14% over last month. Townhouses also saw a drop in average valuations of 2.63% while condominiums actually saw average valuation increase by 3.32%.
Central Okanagan Average Price for Residential Properties (All)
AUGUST 2018 - Months of Inventory by Neighbourhood
What does this mean for people thinking about selling their Kelowna home?
This fall may very well be a great time to sell and maximize the appreciation in value properties have experience in the past few years. In the short term, the probability of values edging downwards and inventory levels increasing is likely greater than the probability of further appreciation and lower inventory, meaning that it may prove advantageous to sell now rather than in 6 months to a year from now. Keep an eye on the market and remember achieving a sale is may now take months so a lot can happen even from the time you list until the time it’s sold.
What does this mean for people thinking about buying a Kelowna home?
Across the board the scale has tipped in the buyer’s favour. Don’t let anybody rush you. This past month we saw, on average, 15 new listings per day. You have more choice and if you miss or pass on one property, another will come along. In terms of price, do not pay too much! You need to be prepared to walk away if you’re not getting the right deal.
All data is from OMREB/MLS® System. Interpretations of the data is done with the utmost care and attention, however, errors and omissions may apply. Selling and purchasing real estate comes with risk and should be discussed in depth with your real estate agent of choice.
The Kelowna real estate market started the second half of 2018 continuing this year’s pattern for lower sales and greater inventory compared to 2017. Once again, the word on the street is, it’s a balanced market. However, a change from the past few month’s consistency was seen in valuation and not in the direction many thought it would. Kelowna and the Central Okanagan saw record breaking valuations with the average overall residential sale price increasing by 6.1% and the average single family residential sale price increasing by 9%, which both represent the largest month-over-month valuation increases seen since March