Tuesday, May 26th13.4°C
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Ups and Downs in the World of Housing

Fasten your seat belts!

There are currently 1,100 residential detached single family homes for sale in Kelowna.  This is a pretty big number for a town our size especially in the middle of a hot market, but breaking down that number changes the narrative a bit. OK, it changes it a lot.

If we eliminate homes currently for sale in Beaverdell and Fintry (just because) there are only 134 homes for sale that are priced under $400,000.  This is a pretty geographic area stretching from Oyama down to Peachland and across to Joe Rich on the way to Big White.  134!  The sub $400,000 market has produced 220 sales so far this year so demand is high while supply is limited.  This market is ultra super-sonic competitive for buyers and anything reasonably priced is selling quickly.   Buyers already know this though and are often faced with unenviable options of finding more money (usually unrealistic) or lowering expectations.  Waiting for prices to drop is always an option but if you can find a home in a nice neighbourhood priced in the $300s just take the plunge and grab it.  It might not have a double garage, perhaps no ensuite and a lot of other things on your list may be missing but that same home will be more expensive next year and it could be the smartest financial decision you’ll ever make.

At the other end of the market things are different.  There are 274 residential single family homes priced over $800,000 and we’ve reported 51 sales this year.  That works out to two years of supply!   Unlike first time buyers in the affordable part of the market, buyers at this end of the spectrum have a lot less pressure on them to make a decision today.  They can see a home and think about it for a while before making an offer.  If they lose the home they liked, they can always pursue the two others for sale on the street.  Advice for sellers hoping to move this year is when an offer comes in, figure out a way to make it work.  The price might be less than what you’re hoping for and the dates might not be ideal, but just make it work somehow because your neighbours would love to be in your shoes and they’d figure out how to make it work.

The Canadian real estate association reported that the average sale price for a home in Canada was  $439,000 in March.  The average sale price of all homes (including condos and townhouses) in Kelowna was $443,000 and it was $520,000 for residential detached last March.  The spread between Kelowna prices and the Canadian average used to be significantly wider and the gap is clearly shrinking.  How come?  The simple explanation is the Vancouver and Toronto markets skew the numbers off the charts but haven’t they always?  Perhaps our service based economy is keeping prices from surging here while they do elsewhere.  Kelowna has never had a blue chip economy especially when compared to major Canadian centres but we’ve always had a blue chip housing market.  Either that’s changed (it hasn’t) or we’re poised for housing gains to which the rest of Canada has experienced.  Stay tuned.



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First time home buyers

If you're a tenant, the rental market in Kelowna seems to be going from bad to worse as inventory of available rental properties continues to disappear.  This is good news for landlords who can choose to be more selective in selecting tenants and homes don’t have to sit vacant for any stretches of time.  It’s bad news for tenants who are scrambling for pretty much anything they can get if they want to live in Kelowna and it’s not going to get any better as summer nears.  What’s a tenant to do?  You can likely see this coming a hundred miles away considering a real estate agent is tapping away at the keyboard, but it might be time consider putting your big toe into the housing market.  I won’t lie, the Kelowna housing market can be soul destroying for first time buyers considering what your relatives are paying in other parts of the country for similar homes, but let’s take a look at what’s out there.

If you have a bias against  Glenrosa or Rutland then stop reading now and carry on with the rest of your day.  Everyone knows the biases against some communities in town and most of us know those biases are under served.  Still with me?  Good. 

There are 20 residential detached homes for sale today in Glenrosa including four of them priced under $350,000.  There are 46 homes for sale in Rutland (south and north) including 13 under $350,000.  That’s plenty to choose from…..and you only need one!  There are affordable houses in other parts of Kelowna too, and I haven’t even started on condos or townhouses.  MOST OF THEM ARE NICE with good neighbours who will water your plants when you’re away and, your kids or future kids will be in a good school.  I promise.   I know the deck seems stacked considering wages haven’t gone up anywhere close to the rate of housing prices but the previous generation of first timers had to negotiate interest rates in the 7% to 9% range instead of where it is today.  

If you are considering getting into the Kelowna housing market I’m having an informal “First Time Buyer Seminar” with Audrey McKay from Scotiabank.  How informal?  We’re meeting at Perc’s Place Coffee House in Orchard Plaza (beside the movie theatres) on Wednesday, April 29 at 6:30 PM.  Please give me a call or text at 250-979-8066 if you plan on attending. 



Real Estate update

Everything is pretty much balanced, normal and going as expected so far this year.  With the weather warming up it’s safe to say we all survived another winter and housing numbers are where most predicted.  There are currently 1,500 residential freehold homes for sale including 1,058 residential detached.  This is a reasonable number for Kelowna considering our population base but broken down it’s clear it isn’t an easy town to buy a house. 

Residential Detached Freehold

                      

PRICE RANGE # OF HOMES
   
Under $400,000 151
$400,000 to $600,000 397
$600,000 to $800,000 252
Over $800,000 258

It’s tough to buy a house here for two reasons.  The first is obvious looking at those numbers…nearly half of the available homes are over $600,000 which take a sizeable number of buyers out of the market and secondly, there’s a lot of competition for homes priced where most of us can afford. Is this good?   Whether or not you think this is good depends on if and when you bought your home and if you’re planning on up or downsizing.  Having a lot of equity in your home makes things easier but it’s certainly tough on first time buyers trying to negotiate mortgages.

There have been 710 residential sales so far this year including 266 in March.  We’re entering the busiest time of the year for real estate and as long as mortgage rates stay reasonably low it’s looking like another solid year in the Kelowna Real Estate Market.

The Kelowna condominium apartment market is chugging along nicely with 474 units for sale right now.  These come in all shapes, sizes and price ranges and condo growth over the past fifteen years can be attributed to the high cost of residential homes and affluent out of town buyer.  This market appears to be growing as we speak in part because more and more Western Canadians who chose Arizona over Kelowna are deciding that Yuma just isn’t as great as all the brochures said it was and we’re getting them back.  Of the 474 condos for sale, 130 are tenanted and another 115 are vacant.   We generated 88 condo sales in March making this segment of the market as strong as it’s been in a while.

 

For a complete list of homes and condos in Kelowna check out www.okanaganbc.com

Or, call Andrew Smith directly at 250-979-8066. Over 22 years experience helping people achieve their dream of home ownership!



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Real estate market review

With the first quarter over and done with it’s time to peek out under our blankets and see what’s going on in our real estate market.  First off, let’s look at what’s for sale.  People usually have a pretty good idea when the market is healthy or not, just by driving around town and seeing the ratio of SOLD signs compared to For Sale signs.  “How come there are so many condos for sale in this building?” is really one of the toughest questions to answer but these days things are humming along nicely.  There are 1,493 residential homes for sale in all with price ranges catering to all budgets.  Here’s a breakdown….

Price Range # of Homes for Sale
   
$250,000 to $400,000 280
$400,000 to $500,000 264
$500,000 to $600,000 226
$600,000 to $800,000 295
$800,000 to $1.2 million 187
$1.2 million and up 252

Forty-six of these homes are in foreclosure, 54 are on leasehold land, 349 have suites and 99 are on lakefront.  All in all, a pretty good reasonable number of homes in every price bracket.   I think we would all like to see more homes priced under $400,000 for people who are starting out but lifetime low mortgage rates are absorbing some of the sticker shock when people see what a $300,000 home gets you in Kelowna. 

To sum up the Kelowna real estate market in a sentence: unit sales up a lot…..prices slightly down.  With the first quarter done, there were 560 residential sales over the first three months at an average sale price of $520,000 compared to the first quarter of 2014 when there were 427 homes sold at $544,000.  Keep in mind that the early months are generally locals buying from locals so I wouldn’t read too much into either number at this point. 



Read more Ups and Downs in the World of Housing articles

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About the Author

Andrew Smith has been helping people buy and sell Real Estate with Royal LePage since 1993. He moved to Kelowna from Vancouver with his wife Jo Ann and two children. He chose Kelowna for the lifestyle and to raise his family.

Andrew was was also Best Selling Author on Amazon for House Virgins- How To Buy A House The Right Way The First Time.

 

"I help growing families smoothly transition to a larger home by making the finding, buying, and selling process easy."

 

You can contact Andrew by email:  [email protected]

Visit his website here:  http://www.okanaganbc.com/

Follow Andrew on Twitter:  @smithap01

 




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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet presents its columns "as is" and does not warrant the contents.


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