OK Housing Prices Healthy

The experts say the Okanagan's housing market will remain strong despite what's happening in the U.S.

House prices in the U.S. fell by more than three per-cent in the second quarter -- that's a 20 year low. And analysts say there's no recovery on the horizon.

Despite what's happening south of the border, CHMC says housing prices in BC are starting to cool down, but remain strong.

"What we're seeing in BC is that home prices have reached a level where it's starting to eat into demand," says CHMC Senior Market Analyst, Robin Adamache. "There's also a projection that interest rates will go up slightly, which will also dampen demand. However, the overall picture shows healthy price growth accompanied by strong sales and construction."

Adamache says B.C. housing prices rose by 12 per-cent this year, but the increase will drop to six or seven per-cent in 2008.

She says one of the main reasons why B.C. is bucking the U.S. housing trend is because of 'sub-prime' loans -- a practice of making loans to borrowers who do not qualify for the best market interest rates because of their deficient credit history.

"In Canada, when you look at the total mortgage market that is sub-prime, there's a much larger proportion in the United States," says Adamache. "Some say that about 20 per-cent of the mortgage market in the U.S. is sub-prime whereas in Canada it's about three to five per-cent."

There's no sign of housing prices in the Okanagan taking a nosedive.

Adamache says overall housing prices rose by more than 15 per cent in 2007.

The average price for a single detached home in Kelowna in June was $450,000 -- up by 16 per-cent compared to June 2006. Penticton saw the largest increase. Prices there rose by more than 20 per-cent in June. A single detached home in Penticton sells for about $365,000. Vernon's increase was only six per-cent in June where a home will cost about $370,000.