Real Estate market predictions

Photo: The Canadian Press - Sean Kilpatrick

Kelowna's real estate market is booming; sales are up, prices are up, everything is up. 

A new Housing Market Outlook Report released by RE/MAX Canada shows nothing but positivity for the upcoming year. 

The report indicates there is considerable optimism in Kelowna’s 2015 real estate market, as consumer confidence continues to rebound as a result of low interest rates, steady job growth, and a strong prairie resource market.

“People are feeling better about their job situation and the overall economy. Just go around to the restaurants and out in the city, people are out and about buying goods and services, including real estate and cars,” says Cliff Shillington of Remax Kelowna. “I am very happy to say that the vibe in Kelowna is the most positive it has been since 2008.”

Photo: Ed Ouellette

Their annual outlook report predicts sales will continue to grow and the price of an average house will increase by seven per cent in 2015, one of the biggest increases in Canada.

“Our projections for next year — if everything stays the way it is — is a very positive growth factor. We are going to see ongoing increased unit sales and we are going to see a small increase in the average sales price,” says Shillington.

The average residential sale price this year has been estimated to be $428,000, a rise of eight per cent over 2013. RE/MAX also says the 2014 housing market was exceptionally active with an increase of 23 per cent in year-over-year unit sales.

All projections imply that it is a seller's market.

“If you are selling a property that is under $500,000 you are in to a seller's market - there is so much activity there now,” says Shillington.

RE/MAX says homes under $500,000 are in a very hot seller's market.

They claim that due to reduced inventory, the average residential sale price is expected to increase, and while sales have increased, inventory has not maintained pace, with active listings down 16 per cent compared to last year.

This lack of supply, according to RE/MAX, has resulted in multiple offers as buyers compete for attractive, well-priced properties.

Vantage West Realty Senior Partner Jeff Anderson agrees that prices are going up, with more active buyers and less inventory in the market, but not as high as RE/MAX predicts.

“What you are finding is that houses are selling for a little bit more than what they normally would if there was more inventory for buyers to chose from,” notes Anderson. “I don’t feel like it is going to go up into the seven per cent range, but it is definitely right now a strong market because of the supply and demand that it is out there.”

The one issue Shillington mentioned, that would change RE/MAX predictions, is the current price of oil.

If oil continues to decrease, Shillington says our market will be affected, as a large portion of buyers are from Alberta.

“The only caveat depends on the price of oil. It will affect the Alberta buyers and could have an effect on our market as well,” says Shillington.

For the full housing outlook report, including the rest of Canada, click here.