The real estate market in Kelowna and the Central Okanagan finished off 2019 on a high note! Residential sales are up once again in December compared to this time last year. Like last month the year-over-year increase for the month was substantial. There were a total of 271 transactions which was a 39.69% increase over December 2018. Condo sales lead this sales growth with 74 sales, up a whopping 60.87% from the 46 sales last year. This trend is very promising. Overall sales for the year started off sluggish and by the end of the first quarter of 2019 there had been only 799 year-to-date sales. This was a 25.6% decrease from the 1074 sales in the same period of 2018 which also saw a decrease from 2017. There was a lot of noise about the slowing market; however, by the end of May monthly sales were gaining year-over-year and continued to do so through much of the remainder of the year. Kelowna and the surrounding area including West Kelowna, Peachland, Lake Country, and Big White, recorded 4,575 sales compared to 4604 in 2018. We all but caught up!
The average selling price of residential real estate in Kelowna came back down from it’s November peak to settle at $556,127 just a hair (1.3%) below the average for the year. This compares to last year where December average valuation was 6.3% below the average. The average valuation for the 4th quarter of 2019 was $581,347 having seen a solid gain from the 1st quarter average of $534,648. It’s fair to say that even in a softer market than Kelowna experienced in the run from mid-2015 through the end of 2017 home values are continuing to rise only at a more modest pace.
December saw 118 single family detached homes sell which was a 29.67% increase from December 2018. The average selling price for single family detached homes dropped from a rather unusually high mark in November to a more seasonal $679,304. This is down just 3.15% from the average for the year. The average valuation for the 4th quarter of 2019 was $706,385 which is up ever so slightly from the 1st quarter. Single family homes in Kelowna are selling for as much as they ever have but don’t expect to buy today and sell in 6-months at a profit. Those days are gone… for now.
As already noted, condos sales were truly smashing for this time of year with 74 transactions recorded. The Kelowna condo market has become relatively steady. Not only is the number of sales much greater than it was in December 2018 and even ahead of December 2017, what’s perhaps more telling is the spread from the year’s summertime peak to now. This past year condo sales peaked in July with 134 sales meaning that December sales were down 44.77% in comparison. Rewind to 2017: condo sales peaked that year in May at 205 sales meaning that December 2017’s sales were down 64.87% from the peak even with 72 condo sales. This is suggestive that we while sales are slower due to the season that the market is still solid and Spring is sure to see some great activity! The average selling price of a condo in December was $363,855 right on the average for the year. So again December valuations are at the average in what is typically the time of year we see the lowest prices.
December saw 45 townhouse sales, the lowest number since February but still a 45.16% increase from December 2018. The average selling price of a Kelowna townhouse in December was $489,376 sitting only 2% below the average for the year. Out of all product types townhouse are seeing the least amount of valuation increase. The 2019 average came in at $499,454 compared to the 2018 average of $495,013. But while valuations are not taking off the number of transactions has increased substantially over this past year. In 2018 there were 562 townhouses sold and in 2019 sales were up 40.74% to 791! Townhouse sales are playing a significant role in our market having made up 17.28% of all 2019 sales.
Central Okanagan Avg. Selling Price for Past 12 Months by Market Segment
Inventory reached its lowest level since January 2018 with only 1,697 residential properties listed for sale at the end of 2019. Inventory is down 15.82% from last month and 41.44% from the year’s peak in June. Of course with the strong sales we’ve been having we are going into January 2020 in a much different environment than last January. We are sitting at 6.26 months of inventory which is on par with most of the year if not among the lowest number this year. This is in contrast to the 9.43 months of inventory we had at the end of last year. Looking back over the past decade it’s been quite common for the months of inventory to rise coming into the Winter months but that has not happened this year; in fact it’s done the opposite. In comparison to the market conditions we’ve seen over the past 18 months now is a great time to be selling your home even though Kelowna and the Central Okanagan are not currently experiencing a seller’s market. While I like to focus on the facts I feel there is something to be said about the potential that sales could actually be higher if the inventory was there to support it. I feel like I have seen an influx of local Realtors® reaching out through our network of professionals for help in finding homes for buyers they are actively working with. It’s anecdotal but it feels like the demand is high and the supply is low.
Strangely the time it is taking homes to sell has continued to rise. The average Kelowna home now takes almost 3 months to sell. In December homes that sold took 12% longer to sell than in November with the average days on the market at 84 days. This is the longest in more than 3 years. Typically we see the speed of the market slow down for the Winter and then speed up starting in about March. What’s strange about this is that it is out of line compared to other key performance indicators for this time of year. This again suggests to me that while there is solid demand purchasers are not under pressure to purchase the wrong home or pay the wrong price. There are a lot of purchasers but they are behaving patiently and rationally.
Now on to the first month of a new decade. Happy New Year!
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.