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Ups and Downs in the World of Housing

Home inspections

The offer has been written.  Long and careful consideration went into the offer price using recent comparable sales and a week or so of visiting similar homes for sale and pen finally meets paper. Standard conditions with a reasonable time frame are part of the offer and everything is set for a seller to respond. The buyer has been pre-qualified for a mortgage and everyone is excited at this point. The Realtors meet with the sellers at their kitchen table and glances of relief are exchanged and a few small changes are made including a slight increase in the price.  Buyers quickly agree to the changes and sign and initial where they’re supposed to and a real estate transaction happens.  What could go wrong at this point?  The sellers make mental arrangements for moving boxes and the zillion details involved with moving and the buyers do the same. 

The next few days are critical in keeping this deal on track.  The lender still has to approve the home and financing still has to be approved regardless of any pre-approval.  We’ve all been through this process and know enough that we have to provide CRA information, job history, letters of employment and our credit card statements.  The home inspection is probably the most important part of keeping this deal from falling off the rails and the worst thing people do at this point is ask a friend or relative to do the inspection for them.  “A friend of my dad said he’d do the inspection.”  NOOOOOOOOO!!! 

  

Home inspections from non-professionals never seem to go well in my experience and I couldn’t imagine agreeing to do a home inspection if I was the friend or relative.  They just miss too much largely because it’s not the sort of thing they do every day.  I’ve sat through a lot of home inspections and on the surface it looks pretty easy and if push came to shove I could do a reasonable job on a well built home.  I’d never want to put myself in that position though because I’d miss something.  If I was asked to help with a home inspection for a friend or relative I’d probably overlook things if I wanted my friends/relatives to ultimately move into that house.  Every home inspector I’ve worked with in Kelowna has been top notch and none of them have blinked when passing on bad news about a home to my clients.  It’s a skill in itself explaining a heat pump to an office worker.  Sun Rype workers usually don’t know the life expectancy of a tar and gravel roof but might be fearful because they’ve heard they’re bad.  I’ve seen buyers go through with deals even after brutal inspections and I’ve seen buyers walk away from deals even after a glowing report but it’s significantly better to have someone do the inspection who has no agenda other than giving you a detailed analysis of the condition of a house.

 

Quick Market Facts

2,420 Year to date residential sales so far in 2014.  Average sale price $545,000.  Up significantly from last year at this time when we recorded 2,038 sales at a $489,000 average.  Remember, last year was considered a good year. 

Same for apartments.  891 apartments sales this year compared to 654 this time last year.  Prices up from $237,000 last year to $246,000 this year.  Who predicted those numbers?  The optimists win the 2014 prediction game….pessimists dusting themselves off getting ready for 2015 starting early with Ebola fears, Oil Prices, IsIs etc.   The list goes on and on but people seem to still want to live in the Okanagan despite what’s happening in the world around us.

To view Kelowna homes for sale Under $500,000 click here (http://www.okanaganbc.com/listings-search/#/249202450) or call Andrew Smith directly at 250-979-8066.

Follow me on Google Plus https://plus.google.com/+OkanaganbcKelownaRealEstate/posts

Over 22 years experience helping people achieve their dream of home ownership! http://www.OkanaganBC.com 



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Where normal Kelowna people live

Kelowna housing numbers are often misleading because of the large number of high-end homes that sell in this city especially during the summer months.   We’re in the fourth quarter now and things settle down a bit with locals buying from other locals.  People with jobs, kids, minivans and mortgages buying from people who also have jobs, kids, mortgages and minivans.  People like you and me.  There are fewer Albertans in town and things like proximity to schools, churches and grocery stores becomes more important than whether the lower floor custom built yoga studio overlooking the infiniti pool has oxidized air or not.  Local buyers don’t gasp in horror at the site of laminate flooring or a do-it-yourself deck without a permit.  Let’s randomly look at the following neighborhoods….Rutland, North Glenmore and Glenmore. 

These communities have seen prices increase like the rest of Kelowna over the past decade and experienced sharp increases through the first part of 2008 and suffered an erosion of equity starting in 2009.  Same as everyone more or less.  Historically speaking, after looking at the first three quarters in 2007 and 2008 these four sub-areas saw prices skyrocket from $428,000 to $478,000 in one short year then plummet back down to earth in 2009 to $408,000.  That was quite a roller coaster.  Going back in history a bit further, ten years ago Rutland-Glenmore homes sold for an average of $262,000.  So far this year an average Rutland, North Glenmore, Glenmore sells for $447,000 which is up about 6% from last year’s $420,000.   In sum the good news is that things are pretty good for sellers these days.   Note: if you’re checking my math I’ve taken out lakeshore properties in McKinley - it skewed my numbers too much and, just because.  Remember, my blog, my rules.

With 208 single family residential detached homes for sale in these four neighborhoods 8 are priced under $300,000, 19 under $350,000 and 48 under $400,000.  With 440 sales recorded this year it works out to about 50 sales per month.  This means there is about 4 months worth of housing inventory available making it a balanced market. 

I hate to end on a doom and gloom note but the downside is that these areas have historically attracted first time buyers but high price increases over the past decade has changed the outlook for people entering the housing market.  Long gone is the $160,000 bi-level in spring valley and qualifying for $350,000 similar home is significantly tougher making these areas move-up areas with first timers settling for condominiums or townhouses.  Like it or not this is the new normal.  First timers are being forced to make housing choices their parents likely didn’t have to make and at the same time are being forced to save a lot more for a down payment. 

 

To view Kelowna homes for sale Under $500,000 click here (http://www.okanaganbc.com/listings-search/#/249202450) or call Andrew Smith directly at 250-979-8066.

Follow me on Google Plus https://plus.google.com/+OkanaganbcKelownaRealEstate/posts

Over 22 years experience helping people achieve their dream of home ownership! http://www.OkanaganBC.com



Where are Kelowna buyers coming from?

Let’s get right to the stats part of this update and get it over with quickly.  Spoiler alert….same old, same old.  1,620 residential homes for sale right now and 2,155 homes sold this year.  Works out to just over 6 months’ supply of homes making it a balanced market.  Overpriced homes aren’t selling, high-end homes take significantly longer to sell than affordably priced ones and we don’t have to deal with too many multiple offers in any price range.   These are normal times with few foreclosures and we don’t have to deal with buyers being talked out of buying a home by ultra-cautious relatives certain the housing market will fall off the cliff.  Our teachers negotiated a settlement this week which means everyone will be in their normal routine again and our second largest employer will be printing pay cheques again.  Amen.  No stats on this and regardless of which side you were on, the teachers’ strike had a negative impact on our economy.

Last month 25% of home buyers on our board area were move up buyers and 17% were first timers.  These two groups are critical in any housing market, especially ours.  Interestingly, 13.7% of the buyers moved from single family dwellings to stratas while only 4% moved from strata to single family.  I thought that number would have been the reverse.  Condo buyers are stereotypically first time or last time buyers (yes, I know there are a zillion exceptions) but I’m surprised to read that over 3 times more are downsizing that upsizing.    Perhaps this is because single family prices are increasing at a faster rate than condo prices making it even tougher to buy a house with a yard. 

50% of homes bought last month were from buyers within the Okanagan.  People from Winfield buying in Peachland or a family moving from Glenmore to Kettle Valley.  No surprises here. 

23% are from Alberta.  Thanks Alberta….glad you like our town so much.  Don’t know what we’d do without you.

0.7% from the Yukon.  We should find out who this family is, invite ourselves over and throw a party.  They’d probably do that for us if we moved to Whitehorse.

That's all for now.  Thanks for reading and be careful driving through school zones again.

 

To view Kelowna homes for sale go to http://www.OkanaganBC.com or call Andrew Smith directly at 250-979-8066.

Follow me on Google Plus https://plus.google.com/+OkanaganbcKelownaRealEstate/posts

Over 22 years experience helping people achieve their dream of home ownership!



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August 2014 Kelowna Market Update

The statistic that jumps out after looking at August numbers is that there are more homes for sale right now priced over $1 million (332) than under $400,000 (330) in Kelowna.   Affordably priced inventory is dwindling.  It’s really tough these days for first time buyers hoping to get into the Kelowna housing market in a nice neighbourhood, near a good school in a 3 bedroom home that doesn’t need maintenance. The 330 affordably priced homes becomes 240 homes once you eliminate half-duplex, bare-land stratas, etc.  When first time buyers get turned away due to high housing costs it will eventually impact everyone else and young families will have to decide to look in other communities to raise their families or settle on a condo.  This has been the case for some time now but it’s particularly grim this year.  Enough bad news.

Overall, the housing market is just booming.  The average sale price for August was $590,000 compared to $503,000 last August.  The number of Kelowna homes sold jumped from 223 August 2013 up to 276 last month.  The momentum that has been building continues.  The high average sale price last month can in large partly be attributed to 20 homes selling for over $1 million which pushed averages way up.  With 332 million dollar plus homes on the market and 20 sales the odds still weren’t in your favour if you own a higher end home and it’s for sale, but the number of showings has probably increased.  If your home is for sale and is priced under $400,000 it’s likely getting a lot of activity these days.  Even in this market buyers aren’t stupid and just won’t pay $380,000 for a home that’s worth $360,000.  Sellers holding firm on prices hoping that the market will eventually give them their asking prices are rolling the dice in the hope that this continues through the Fall and Winter.  Good luck to you.

There have been 1969 sales so far after the first three quarters.  All we have to do is limp along to the end of the year in order to match last year’s total of 2,400 sales.  It’s looking like we will be at least 5% higher and perhaps 10% if things continue.

 

All the best and hope to see some of you on the open house circuit over the next few weekends.

Click Here for Kelowna Homes under $400,000.



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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