BC Housing demand to Ease going into 2016

The British Columbia Real Estate Association has released its 2015 Fourth Quarter Housing Forecast Update. The Multiple Listing Service residential sales in the province are projected to surpass 100,000 units this year. This level of home sales will be the third strongest on record and mark the first year since 2007 that BC home sales exceed the ten year average. After climbing 15 per cent in 2014 and nearly 20 per cent this year, BC MLS  residential sales are forecast to decline 7 per cent to 93,700 units in 2016. 

Less latent pent-up demand and gradual upward momentum of mortgage interest rates is expected to ease housing demand next year  The inventory of homes for sale is now at its lowest level in nearly eight years. Sellers’ market conditions are prevailing in many communities and causing home prices to be pushed higher. The average MLS residential price in the province is projected to increase 10.2 per cent to $626,000 this year and forecast to slow to a 2.2 per cent increase at $639,700. Total housing starts in the province are projected to reach over 30,000 units this year, the highest level of production since 2008. Capacity constraints and an edging back of consumer demand is largely behind a forecast decline of BC housing starts, with it being forecasted to about 28,800 units in 2016.

Market Report for July 2015

Some statistics for the Central Okanagan from January through July 2015:

Pricing:

 Residential homes YTD: Average $506,539 up 2.23% - Median $475,000 up 5.56%

 Apartments YTD: Average $259,296 up 4.83% - Median $230,000 up 2.22%

 Townhouses YTD: Average $361,405 dn 1.92% - Median $344,950 dn 1.44%

AVERAGE PRICE FOR JULY 2015

Residential $535,845

Town Houses $390,680

Condo's $272,638

Lots $208,877

 

RESIDENTIAL HOMES that SOLD JULY 2015 were 282

Average days on the market for July 2014 - 73 days /July 2015 - 64 days. In Kelowna there are 1985 active listings, in West Kelowna there are 1058 active listings

To summarize, sales of houses, apartments and townhouses show significant gains year to date. With sales up 9.51% YTD.

It is taking fewer days to get a sale and house and apartment prices are rising. One surprise is that townhouse prices show a bit of a decline in average and median pricing. 

 

What does this mean? Well, there is no doubt real estate sales are up significantly. We feel and see it every day and yet prices, while rising, are not rocketing skyward. This may be the influence of news from across the country and around the world, including what is happening in Greece. Yes, our economy in BC is doing well and we remain positive about our province and the country. Politics aside, employment is stable and even the issues with oil don’t seem to be having

a significant impact on our economy or real estate. The economists tell us the lower Canadian dollar is clearly helping to drive exports which is critical for a strong Canadian economy and strong employment. So what we have seems to be a stable economy yet a healthy dose of caution on the part of the populous.

 

This is probably a good thing and may well help us to maintain a pattern of ongoing slow but steady growth in our economy in general and in real estate in Kelowna.

Home Sales in BC Post Strongest March in Eight Years

The British Columbia Real Estate Association reported that a total of 9,101 residential unit sales were recorded by the Multiple Listing Service in March, up 37.6 per cent from the same month last year. Total sales dollar volume was $5.8 billion, an increase of 57.1 per cent compared to a year ago.

The average MLS residential price in the province rose to $641,799, up 14.1 per cent from the same month last year. BC home sales climbed significantly in March and  more homes traded hands last month than any March since 2007.

On a seasonally adjusted basis, March has posted the most home sales of any month since December of 2009. Great news! With rock bottom interest rates and rising consumer confidence having strengthened housing markets in most regions of BC.

Many of the board areas are now exhibiting a seller's market conditions with home prices advancing well above the overall rate of inflation. During the first quarter, BC residential sales dollar volume was up 33.2 per cent to $12.7 billion, compared to the same period last year.

Residential unit sales were up 22.5 per cent to 20,139 units, while the average MLS residential price was up 8.7 per cent at $630,435.

OUR STRONG SPRING MARKET CONTINUES

Real estate activity in March just continued where February left off with unit sales up almost 29% over March of last year with 516 properties of all types changing hands. That means year to date our market is up 23.5% over last year. Our listing inventory is now starting to build as 1,205 new properties came on to the market in March for a total listing inventory of 3,551 which is still about 300 fewer listings than last year at this time but is up about 280 more than in February.

Percentage wise for March, townhouses had the greatest gain in sales at 44% increase over last year with condos following closely behind at 42%. Single family homes, which make up the bulk of the sales, were up over 30%. As far as average price goes, single family homes have held steady at $487,700 year to date but the median price is up 4% at $462,500. Condos and townhouses have maintained a relatively flat median price but condos are starting to show possible gains.

So far the price of oil has had very little effect on our market but it may be too early to conclude that it won’t. Alberta is now making up about 12% of the buyers, down from 18%, but the biggest jump in purchases is from our own local area where they make up about 65% of all purchases, up about 10% from before. The very low interest rates have definitely helped first time home buyers get into the market and overall consumer confidence is strong. Recently, a BC economist stated that if one is not associated with the oil industry, the BC economy is very good for everyone else. With the resurgence of the US economy demand for BC resources and soft wood lumber is increasing. Tourism is expected to increase with our weaker dollar, particularly with the Americans and one would be pretty hard pressed to find a better tourist destination than the Okanagan valley right now.

As we move into April and May, traditionally two of the busiest months, it will be interesting to see this strong trend continue and how it will be affecting housing prices. As we all know, if the listing inventory cannot keep up with the demand, we will see prices continue to climb. So, if you have been sitting on the fence trying to decide whether to make your first purchase or move up into another home, now might be the best time to actually do it.