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Okanagan Real Estate Prices Peaked, Its a Buyers Market!
It‘s not statistically official yet, but the rocket of real estate prices in the Central Okanagan is about to return to earth.
Central Okanagan real estate prices bucked a national trend by not turning downward in June compared with the same month a year ago, but that story is likely to change very soon.
Peter Lockhart, president of statistical information for the Okanagan Mainline Real Estate Board, said that there wasn‘t a year-over-year decline in June – as has been the case in the rest of the country for the first time in almost 10 years – although the market here has cooled, and prices will probably be falling this month or next, he predicts.
“There has not been a decline yet in the Central Okanagan, but listings are up and sales are down,” said Lockhart. “It takes time for what happens in the market to be recorded in the data, and we should see that in the next months.
“We‘ve had five years of an incredibly buoyant market, but we‘ve reached the point where buyers won‘t pay the high prices. They have decided to wait and see.”
The average price of a Central Okanagan home in June was $512,867, compared with $503,340 in the same month last year.
However, the number of houses on the market was 1,421 compared with 992 in June 2007. Total sales dollars last month decreased by 46 per cent from June 2007.
The number of new listings by Canadian Real Estate Association members in June rose to 56,639, up 6.2 per cent from the year-earlier period. The number of sales of existing homes fell by 15 per cent to 30,751, however, resulting in an increase of unsold properties on the market.
Gregory Klump, the association‘s chief economist, said the small decline in the average price was the first since early 1999 and reflects a slumping economy and the huge run-up in prices in recent years in Alberta‘s energy-based economy.
In June, the major market MLS residential average price edged down 0.4 per cent year over year to $341,096.
“The size of price increases has been moderating this year,‘‘ said Klump. “This is actually the first monthly year-over-year decline in average prices since January 1999.‘‘
Klump said the slight decline in average price comparisons reflects the impact of the surge in average prices experienced last year in Calgary and Edmonton.
The real-estate group said the average price in these markets has stabilized since March this year in line with a balanced market.
“That decline really reflects the impact that Calgary and Edmonton had on the overall situation last year,‘‘ said Klump.
Avery Shenfeld, senior economist at CIBC World Markets, said there has been a noticeable softening of the Canadian housing market over the past few months.
“Some of that is coming in cities where prices had gone through the roof in the previous one or two years,‘‘ he said. “So we have to take small retreats in some of those markets with a bit of a grain of salt.”
Douglas Porter, an economist with BMO Capital Markets Economics, said in a note to clients that housing market activity continued to slide in June, “as wobbling consumer confidence triggered another double-digit decline in sales.‘‘
“The sales declines were broad as Vancouver, Calgary and Toronto in the past year.”
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