“The consensus within the industry is this is a positive outlook for the year ahead and shows signs of the housing market normalizing,” said Okanagan Mainline Real Estate Board president Michael Loewen, a realtor with Royal LePage Kelowna.
“A strong level of demand at the back-end of 2019, backed by an uptick of growth and consumer confidence, has helped push 2020 off to a great start.”
On Thursday, the board released January figures showing 250 residential properties of all kinds (fully-detached, single-family, townhouse, condominium, duplex, mobile home) sold during the month.
That’s a 30% increase in number of sales compared to January 2019.
The average-selling price of fully-detached, single-family home in Kelowna in January was $724,367, a 5% increase from the $688,886 it was at in January 2019.
The average selling price of a townhouse in the city last month was $457,615, down 6.4% from $489,037 in January 2019.
And the average selling price of a condominium last month was $382,445, up 14% from $336,258 in the same month last year.
For last half of 2018 and most of 2019, the local housing market sputtered. Sales softened and average selling price dropped as a four factors impacted the market — tough new mortgage rules, speculation tax and buyers from Vancouver and Alberta drying up.
In 2017, the market boomed with local buyers active and purchasers from Vancouver and Alberta snapping up recreational, second-home, investment and retirement homes in the Okanagan.
That year, sales set a record at 6,682 and the momentum pushed the average selling price of a single-family home to $781,000 in July 2018.
Sales in 2018 plummeted to 4,603 and in November of that year the average selling price of a single-family home plunged to $625,000.
In 2019, sales slipped a bit to 4,569 and the average selling price rebounded somewhat to $704,000.
Stronger activity at the end of 2019 and the continuation into the first month of this year are positive signs, but not a return to the 2017 boom times.
But it is what’s considered normal. Local demand for housing is solid as consumers are confident about their jobs, incomes and the overall economy.
However, buyers from Vancouver and Alberta are fewer and that contributes to the market not overheating.
A normal market also means there’s more balance for both buyer and seller.
Sellers have to price their home competitively to attract buyers and buyers have time to shop around and negotiate.
In 2017’s boom, homes sold quickly, sometimes with multiple offers driving up the price.
That’s unlikely to happen now as homes take an average of 73 days to sell and buyers have the chance to bargain for a deal below list price.