Kelowna housing market stuck between a rock and a hard place

The Kelowna housing market is currently facing a challenging situation characterized by stagnant sales and prices, as highlighted by recent data from the Association of Interior Realtors regarding September activities. The market seems to be caught in a difficult position, with economic factors preventing any significant movement in either direction.

In September, 149 single-family homes were sold in the Central Okanagan, a slight increase from the 142 homes sold in August. The benchmark price for a typical single-family home remained relatively stable at $1,057,200 in September, only marginally higher than the $1,056,700 recorded in August. The peak for single-family home prices was reached in April 2022, when the average selling price hit a record high of $1,131,700.

Homes sold in September spent an average of 67 days on the market before finding a buyer, an increase from the 60 days reported in August. Overall, the Kelowna real estate market has been sluggish since sales peaked during the post-COVID boom in 2021, with prices reaching their highest levels in the spring of 2022. Since that time, sales have dropped by approximately 40%, and prices have decreased between 7% and 18%.

Several factors, including inflation, rising living costs, stagnant wages, and global political instability, have contributed to a decline in consumer confidence, particularly regarding significant purchases such as homes. The previous trend of homes selling quickly, often in a matter of days due to bidding wars, has largely disappeared. Now, properties frequently remain on the market for two months or longer before being sold.

Currently, the market is primarily driven by buyers and sellers who are compelled to make a move due to circumstances such as divorce, job relocations, or deadlines related to purchasing another property. This situation can lead to intense negotiations, where buyers might seek to lower prices to secure a sale.

In addition to single-family homes, the townhouse segment of the market showed some activity, with 46 townhouses sold in September, a slight increase from the 42 sold in August. The benchmark price for townhouses was nearly unchanged, sitting at $696,700 in September compared to $698,600 in August. The peak price for townhouses was recorded in May 2022 at $829,000. Townhouses are currently spending an average of 82 days on the market before selling.

Condominiums, on the other hand, saw a decline in sales, with 83 units sold in September, down from 96 in August. However, the benchmark selling price for condos did increase to $496,700 from $465,700 the previous month. The record high for condominiums was $550,700 in April 2022, and they typically remain on the market for around 85 days before selling.

Ryan Mayne, president of the Association of Interior Realtors and a realtor with ReMax Kelowna, offered a more optimistic perspective on the current market conditions. "We’re seeing that well-priced homes are being picked up relatively quickly, which is an encouraging sign that the market is gradually moving in the right direction," he stated. He noted that despite ongoing geopolitical and economic uncertainties causing some hesitation among buyers and sellers, the inventory of homes is not accumulating excessively, which helps to maintain a balanced market environment.