May sales dropped 12.7% over May last year after increasing in April. Our local real estate market continues to see-saw it’s way to recovery. Even year to date sales are down 8% from 388 last year to 357 this year. The gradual restoring of overall consumer confidence that we are seeing throughout BC and the rest of Canada is not as steadily reflected in the real estate market in the North Okanagan. This see-saw effect has shown up every other month since November of 2014. Read on for more details...
Sales - The total sales for the 12 months ending May 2015 was at 990, still up 10% from the 12 months ending May 2014. Although the recovering market appears to be loosing some steam, this is still the highest volume of sales in the last 7 years since 2008 but lower than the last 2 month’s 16% and 28%.
Inventory - The average monthly inventory of single family homes dropped 11.9% to 535 for the last 12 months ending in May 2015, again, the lowest average inventory we have seen in the last 7 years. Inventory has not been this low since 2008, at the start of the recession triggered by the US banking crisis. The drop in the 12 month average was less than the 13% of the last two month’s. With more Buyers out there looking for reasonably priced homes Sellers are deciding that they can finally make that move that they have had to put on hold since 2008.
Prices - We continue to see some slight upward pressure on average median prices. At $347,314, average median prices for the last 12 months ending in May 2015 are up 1.2% from 12 months ending in May 2014 and up 7.2% from 2013 when we reached the lowest average median price of the last 8 years. As more Buyers enter the market and the inventory tightens, we will see more upward pressure on prices.
Using an HPI (Home Price Index) is still the best way to determine the value of your home. The HPI considers all the sales of a typical house in a certain area and compares them to the same type of houses sold in the previous years. We find when we do an HPI that house prices are still doing different things in different areas and in different price ranges. I would be happy to do an HPI evaluation on any property you have or want to buy. Simply give me a call or send me an email.
Absorption Rate - The rate at which our inventory is being absorbed by sales dropped slightly compared to last month. The average absorption rate of 14.96% over the 12 month period ending May 2015, is still the highest in the last 7 years and down from last month’s 15.22%. At the end of May 2015, we are still at 6 months of inventory available on the market, the same as last month. This is still considered a Seller’s market and will continue to put upward pressure on prices as Buyers compete for the available homes.
From these numbers, it will be interesting to continue to watch how the spring market unfolds into the slightly slower (historically) summer market. It appears that Buyers and Sellers are hesitating with their plans. Buyers are still leading the way but losing momentum. Sellers who have tried to sell their homes over the last few years will still have a much better chance this year as we see more and more Buyers.
At this point we still expect that the market over the next 6 to 18 months will be characterized by increasing sales and lower inventory moving more strongly towards a market that favours Sellers with more competition from Buyers and slowly rising prices. Prices will rise when consumer confidence gathers momentum and brings with it more Buyers putting downward pressure on available inventory.