November saw a slight dip in sales compared to last November. A lot of this can be attributed to the uncertainty and distraction of the US election. Strong real estate markets are the result of strong consumer confidence. Global uncertainty undermines consumer confidence and often we see that uncertainty reflected in fewer big purchases like homes. According to the BC Real Estate Association, housing demand across the province is expected to moderate next year as declining affordability related to rising prices and government policy interventions limit the number of eligible buyers. However, while home sales are not expected to repeat this year’s record performance, consumer demand is expected to remain well above the ten-year average. I have also heard from other industry leaders that we can expect a more balanced market next year.
Sales - Sales of single family residential homes for the 12 months ending November 2016 was at 1,311, up 39% from the 944 for the 12 months ending November 2015 and more than double the 590 units sold in 2011. Year-to-date sales for 2016 remain strong with a 42% increase over last year. Although the 12 month average for 2016 continues to be the highest in the history of real estate in our area, it is showing signs of losing momentum and may be leading to the predicted more balanced market in 2017.
Inventory - The 12 month average monthly inventory of single family homes is now the lowest since
2008. The 12 month average monthly inventory dropped 107 units to 443 for the last 12 months ending in
November 2016 compared to 550 for the same period in 2015. The downward pressure on inventory may
ease up as we move toward a balanced market in 2017. If that happens it will eventually reduce upward
pressure on prices as demand softens.
Prices - Average median prices pushed higher again and at $383,221 for the last 12 months ending in
November 2016 continue to rise above the highest level in the history of real estate in the North
Okanagan Valley! Average median prices rose 8.6% for the 12 months ending in November 2016 over
last year and are up 15.3% from 2012 when we saw the lowest average median price of the last 10 years.
This is 3.1% higher than the previously highest prices of 2007/08. We may see price increases easing up
in next year’s more balanced market.
Absorption Rate - The rate at which our inventory is being absorbed by Buyers continues to climb. The
average absorption rate of 24.45% over the 12 month period ending November 2016 is up from the
13.94% for the same period last year. Also, at the end of November 2016, there were 4 months of
available homes on the market, up from 3 last month. That is the lowest available inventory for November
since 2004 but we are starting to see that ease up as we head towards a more balanced market.
In the news, we heard about the provincial and federal government’s steps to try and cool the over-heated
market in the lower mainland. These kinds of changes take a while to impact prices as we first need to
see a reduction in sales volume followed by the increase that will happen to the inventory of available
homes. Then the softening of rising price will likely follow. It will be interesting to watch what happens to
our real estate market over the next several months.
What is your next move? Let me help you!
If you have any questions about the market, please feel free to contact me at any time. You can go to my stats page at If you have any questions about the market, please feel free to contact me at any time. You can go to my stats page here to view the graphs and full detailed data.