Do you think we should replace the carpets before listing our home for sale? How about the kitchen cabinets, window coverings, light fixtures or master ensuite?
The list is endless really and these are questions home owners are faced with each and every time they consider selling. Most Canadians are pretty pragmatic when it comes to this sort of thing and spending money wisely comes naturally to most. If a twenty-year-old washing machine still works well there’s really no point in replacing it even if the new ones send you a text once a load is finished. Clothes still go in dirty and come out clean.
The short answer to the “what should we replace in our home prior to listing” question is a basic math question. Since you’re selling, you’re not going to enjoy the new kitchen/flooring so it comes down to whether or not you can make more money on a sale with a renovated room compared to the cost of renovations. All agree? Good. It should go without saying but you don’t want to fall into the trap of spending two dollars to only get one dollar back in return. Yes, your house will be presented to the public for showings and open houses, pictures will be taken and posted on the Internet for all to see but at this point in the game the most important thing you can do is make sure all your home’s major systems are working properly. Have your furnace and air conditioning system serviced, have a roofing company give you a quote to replace your aging roof, call in a plumber to look into that funny noise you’ve gotten used to when the shower is turned on. These sorts of things will come up during showings or home inspections and better to have them looked at sooner rather than later. It always creates a good impression when people see a recently serviced sticker on a furnace.
It’s a completely different story if you’re not planning on selling immediately. The best yield on your investment when it comes to renovations is kitchens and bathrooms and it always has been. The Appraisal Institute of Canada surveys its members annually and they found that renovated bathrooms and kitchens yield 75% to 100% of the original investment when the house sells. If done properly and if you have the money, it makes sense to invest in these rooms first before investing in a hot tub, pool, home theatre room or basement yoga studio. By all means invest in these items if you’re going to live in the home for a while because these sorts of things put your signature on your home, it represents the things that you like to do and ultimately adds value to your home….it just doesn’t make sense to do them just prior to selling.
Home buyers can tell when a home has been upgraded and maintained properly. A home with a well maintained yard takes time and effort but it will make selling your house easier once the time comes. Paint is fairly inexpensive and worth doing anytime and nice flooring makes the world of difference to home buyers. These sorts of things stand out in front of potential buyers and ultimately make generating an offer for your home easier.
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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.
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.
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|
|$400,000 to $600,000||397|
|$600,000 to $800,000||252|
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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