The time that it takes to sell a property is a key performance indicator of any real estate market. A greater Days to Sell figure is a reflection of a market moving more slowly, typically because the supply is also greater; therefore, purchasers have more options from which to choose and don’t feel pressure to make more immediate decisions. For sellers, the Days to Sell figure is also valuable in terms of setting expectations for how quickly a property will be sell. Often media and industry commentators talk about the average days to sell across an entire market. When I’m working with a seller I like to take a deeper dive and look at the specific market segment for their property. This might including narrowing down on property type, neighbourhoods, and one of the most important - price range. The latter being ever more important after a couple years of strong valuation increases met with the downward pressure put on affordability by this year’s changes to mortgage lending requirements.
The following graph compares the Days to Sell for Single Family Homes in Kelowna and the Central Okanagan Valley over the past three months and is segmented into price categories:
As you can see, the more affordable price categories under $1 million have experienced relatively consistent Days to Sell over the past 3 months. In contrast, homes over $1.5 million have experienced increasing Days to Sell, likely in part due to affordability and in part due to the time of year. For a seller, what’s most important to look at here is where the price category is sitting. If you’re priced over $1 million, there is less likelihood that your home will sell in under 40 days and a greater likelihood that it will take upwards of 60 or more.
When looking at Days to Sell it can be useful to not only look at the recent past but also at the historical data. If you’re a seller, I would encourage you to look at data for a few months, starting from the present moving into the future, and go back over a few years. The graph below is an example for the Month of June over the Past 5 Years, however, if you were going to list your property for sale in July, you’d want to look at data for the months of July, August, and September from the Past 5 Years. The reason for this is because Days to Sell is greatly impacted by the time of year; if you list your home for sale in the middle of October, it may not sell until November or even December and during the time the market typically slows down.
The following graph compares the Days to Sell for Single Family Homes in Kelowna and the Central Okanagan Valley, in the Month of June only, over the past five years and is segmented into price categories:
Did you see any trends? You probably noticed that all price categories have experienced a decreasing Days to Sell every June since 2014. This trends speaks to the speed at which homes were selling during that time and the strengthening of the market. The above graph also shows that there is a rather consistent (with the exception of the $1.25M-$1.499M segment) relationship between the price category and the days to sell.
The time it takes for a property to sell is directly correlated to the time of year. The graph below is used less as data to be inferred and more to illustrate the trend we experience in Kelowna and the Okanagan Valley. Looking at Days to Sell over the 2017 calendar year and segmented by price category, all experience a general decrease to Days to Sell in the first half of the year and an increase in Days to Sell in the later half as winter sets in. Additionally, this variation is gets exponentially greater as you move from the lowest price category of $400-599,000 to the $1.5M+ category. The various humps and valleys (most noticeable in the highest three price categories) are caused by a variety of influencing factors, some of which could be valuation, inventory levels, mortgage rates, speculative trends, weather, etc. For sellers looking to take something away from this data, you want to compare more than one past year (and also the current year to date), looking for consistencies over time in the specific price category you are looking to sell in.
Thinking about selling? There is clearly a lot to consider and you’ll likely have a lot of questions. My Spot-On Process™ has been developed and refined to ensure my clients get unrivalled representation, effective negotiation on your behalf, and a fantastic experience every step of the way. Part of that process includes me taking a deep dive into all this data for you so I can best assist you in making good decisions, but the first step is an Initial Consultation so we can identify that there is a fit in working together. Give me a call today!