After the post-election surge in sales for November, December activity pulled back for the typical Christmas holiday season slowdown. In fact, monthly sales of 43 single family units in December 2015 was down 10% from 48 sales in December last year and the lowest December sales in 3 years since 2012. Year to date sales in the North Okanagan continue to trend down 8% from 1,021 last year to 939 this year. What’s in store for 2016?
Sales - The total sales for the 12 months ending December 2015 was at 939, down 8% from the 1,021 for the 12 months ending December 2014. Although the BC economy continues to lead the country, our North Okanagan region continues to show signs of flux in the real estate market... although sales volume is soft and inventory is rising, we are still seeing slightly increasing prices.
Inventory - The average monthly inventory of single family homes actually rose for the first time in 5 years, a response to slowing sales. The average monthly inventory rose 1% to 554 for the last 12 months ending in December 2015 compared to 549 for the same period in 2014. It is difficult to say why this is happening in the North Okanagan when we see stronger markets to the north (Shuswap) and south of us (Kelowna).
Prices - Despite slower sales and rising inventory, prices continue to edge up and we are seeing continued upward pressure on average median prices. At $355,027, average median prices for the last 12 months ending in December 2015 rose 3% from 12 months ending in December 2014 and was up 7.4% from 2012 when we reached the lowest average median price of the last 9 years. With price being one of the last indicators affected by changes in sales and inventory, it will be interesting to watch what happens to prices if sales continue to slow in 2016.
Absorption Rate - The rate at which our inventory is being absorbed by sales fell back in December after November’s jump. The average absorption rate of 13.73% over the 12 month period ending December 2015 dropped below last year’s figure of 15.17% for the fourth time this year. At the end of December 2015, the inventory rose to where there are now 10 months of available homes on the market, up four from last month. This is still considered a balanced market with no indicator as to whether the spring market will see a resurgence in our absorption rate.
It seems that we are ending the year pretty much as it has gone for the last 9 months. With the conflicting indicators of lower prices, higher inventory AND higher prices, it is difficult to say where the North Okanagan real estate market will go in 2016.
For Buyers and Sellers it remains important to look carefully at comparable sales of similar homes in areas similar to where your home is located. That is our only valid indicator of home values in this contradicting market. 2016 should be an interesting year to watch and I will keep you posted as it unfolds.