If you Google the definition of a seller’s market you’ll find out there’s more than one answer. Here’s a good one from the Realtors Association of Hamilton-Burlington.
“In any given month or period, the number of sales is compared to the number of listings taken. If the result is 55% or greater – there are 55 sales for every 100 listings – it is considered a seller’s market. If the result is 35% or lower – that is, 35 sales for every 100 listings – it is considered a buyer’s market. Anything in between is considered a balanced market.”
Seems pretty reasonable to me. Looking back at the April we had here in Kelowna there were 287 residential single family sales and 553 new listings activated. We’re at 52%. This means that overall, using all price ranges, we’re in a balanced market….but just barely. We all know by now that a $400,000 bi-level in Glenmore will sell faster than a $1.1 million home in Southridge because of higher demand. Looking at our housing data closely, there were 172 new listing activations in April priced under $500,000 and we recorded 185 sales under $500,000. Forget about balanced, this segment of the market is scorching red hot and is fully slanted towards sellers according the Burlington-Hamilton formula above. We certainly have a lot of backlogged inventory though that isn’t accounted for in this formula but make no mistake, there’s a new normal in this segment of the housing market.
During the last boom we became experts on multiple offers and assignments. When things slow down realtors become proficient on foreclosures, trades and rent-to-own. The rules of multiple offers on a property are fairly straightforward. Every realtor has a fiduciary responsibility to protect the public and act in the best interest of his/her principal. Just because you write an offer, no matter how strong it is, someone else can write on the same property. Once your offer is accepted, in writing and communicated, the seller can only accept backup offers. I’ve seen situations where two parties wrote on the same home and the seller chose to deal with one offer over the other, even though it was for slightly less money, just because they liked the people better. I’ve seen a lower offer get accepted over a higher one, with similar conditions, because the deposit was a certified cheque, dated that day, made out the seller directly. Lower offers are sometimes accepted because a buyer couldn’t be reached by phone to respond to a counter offer with a quick response time. I’ve even seen offers go nowhere because the seller couldn’t be reached in time.
If you’re buying a house, insist your real estate agent show up and present the offer in person if at all possible. If the seller is out of town, they have a right to be present when the offer is presented to the seller, even if it’s by phone. If everyone is living in town, make yourself available quickly in case you have to make a decision on a counter. It’s much easier for me if my clients are sitting in the car outside the house able to deal with a situation immediately instead of tracking people down. Don’t worry, we’ll track you down if we need to. Realtors have searched out-of-cell range campgrounds before and cold called Disneyland hotels to find people. If you’re a seller in a hot market, answer your phone! When I see someone in a movie theatre or in the middle of a church service take a phone call, I just assume it’s a real estate agent who needs to talk to the immediately.
Until next week, Andy
To view Kelowna homes for sale go to http://www.OkanaganBC.com/ or call Andrew Smith directly at 250-979-8066. Over 22 years experience helping people achieve their dream of home ownership!
Or for houses listed $300,000 to $500,000 go to http://www.okanaganbc.com/listings-search/#/268683117