A triple-whammy of negative forces further slowed Kelowna’s housing market in November.
“Last month, we waited to see how the market would react to the Bank of Canada’s latest interest rate hike and the BC government’s tabling of their speculation tax,” said Marv Beer, president of the Okanagan Mainline Real Estate Board.
“Plus, the market traditionally slows this time of year. We are seeing the effect of all these actions.”
Kelowna’s real estate market is still considered balanced, which means buyers and sellers are equally favoured.
However, it’s a shock after the sellers’ market earlier this year that saw homes sell quickly, sometimes for more than asking price.
A buyers’ market sees purchasers in the driver’s seat, taking their time and negotiating prices less than asking because the market is soft.
“While one might anticipate a sharp shift toward a strong buyers’ market might be positive, the reality is the BC economy is so tied to real estate values that these conditions could result in job losses, mortgage foreclosures and the like,” said Beer.
“It’s never ideal when markets take steep shifts in either direction, and government can do a lot to lessen the peaks and valleys, including a focus on not just dampening demand, but also fostering development of housing that reflects the needs and wants of those wishing to buy.”
The buzz, or lack of buzz, about real estate conditions tends to be a self-fulfilling prophecy.
Earlier this year, when the market was hot, people speculated, momentum built, sales were brisk and prices escalated.
However, the road bumps of higher mortgage interest rates, talk of a speculation tax and an overheated market led people to take a breather, and the market faltered with flagging sales and weakening prices.
Last month, 323 properties listed on the Multiple Listing Service sold with a total value of $173.3 million.
That’s a 31 per cent plunge from the 467 that sold in November 2017 worth $236 million.
The increasingly limp conditions mean homes sit longer on the market before they are purchased.
In November last year, the average number of days to sell was 50.
Last month, it stretched to 63.
The sales skid has also dampened average selling prices.
In November, the average selling price of a single-family detached home, which is considered the benchmark, was $650,785.
That’s down only 3.5 per cent from the average of $674,624 in the same month the year before.
However, it’s a nosedive from the record high earlier in the year of $782,398 in July.
The average selling price of a condominium in November was $329,313, down two percent over the year.
The average selling price for a townhouse managed to increase nine per cent over the year to $513,330.
The majority of buyers, 60 per cent, are first-time, move-up or downsizers from within Kelowna and the Okanagan.
Vancouver was a major source — some months, 30 per cent — of buyers earlier this year and last year when the market was buoyant.
Vancouverites were selling their homes for $1.6 million or more and buying in the Okanagan for half the price.
But the Vancouver market has also declined, slowing the flow of Lower Mainland money this way.
Buyers from Alberta remain steady at about 11 per cent of purchasers, while buyers from the rest of Canada and other countries is constant at about three per cent.
