The real estate market in Kelowna, British Columbia, has seen some notable shifts in the last month, prompting discussions about the possibility of a market crash.
In this blog post, we will delve into the market dynamics of September and explore whether there are indications of a sustained downturn or if the changes observed are part of a seasonal slowdown. It is essential to consider various factors, such as pricing trends, sales figures, inventory levels, and external events like wildfires, to gain a comprehensive understanding of the current market situation.
1. Pricing Trends for Single Family Homes:
In September, the benchmark price of a single-family home in Kelowna experienced a decline of approximately 6%, amounting to a decrease of over $60,000. However, it is important to note that the current benchmark price remains above a million dollars, indicating that prices are still higher than they were six months ago and even a year ago. Throughout 2023, the benchmark price had been steadily increasing, albeit at a slower pace in recent months due to rising inventory levels and a decrease in sales.
2. Sales and Inventory:
While sales figures in September were down by 25% compared to the previous month and the same period last year, it is crucial to consider the impact of the devastating wildfires that disrupted real estate transactions for a couple of weeks. With the decline in sales, it is worth mentioning that only 25% of homes listed in September were sold, meaning that 75% of homes listed did not. The inventory levels, although growing, are still historically tight, providing buyers with more choices. However, increased inventory also means more competition for sellers to attract buyers.
3. Townhomes and Condos:
Similar to single-family homes, the market for townhomes and condos in Kelowna witnessed some declines in September. The benchmark price of townhomes fell by over $20,000 from the previous month, while condos experienced a decline of about $40,000, resulting in an eight and a half percent decrease. Despite these price drops, it is important to note that townhomes have seen overall increases in prices compared to the previous year, however condos have not and are slightly lower than this time last year. Sales figures for townhomes were down by 37% from the previous month and 10% from a year ago, while condo sales fared slightly better with 30% of listings sold.
4. Market Outlook:
With the recent decline in prices, some may wonder if this is a sign of an impending market crash. Considering the potential impact of wildfires and increased interest rates on affordability, it is to conclude that a crash is imminent however inventory is still historically tight and there is pent up buyer demand so a crash is not likely in the short term. The market in Kelowna still leans towards being a buyer's market, with inventory levels indicating more options for buyers. Additionally, it is worth noting that prices have only become slightly less expensive over the past month.
While the real estate market in Kelowna experienced a decline in prices and sales figures in September, it is important to interpret these changes within the broader context. Factors such as wildfires, affordability concerns due to rising interest rates, and the seasonal slowdown may have contributed to the observed trends. Although it is too early to predict the future trajectory of the market, the available data suggests that a market crash is not on the immediate horizon. As always, it is advisable for buyers and sellers to stay informed and work with professionals to navigate the evolving real estate landscape in Kelowna.
For more information on the current market, make sure you check out this video: