Wow! We have to look all the way back to 2007 to see a January like we just had. Sales of single family homes in January this year are up 58% over January last year and have not been this high in 9 years! With just 7 months of inventory on the market, we have not seen January inventory this low since 8 years ago in 2008. An early look at February shows that month-to-date sales are up 40% over last year! Is this the year for the North Okanagan real estate market to really shine? These early indicators could be telling us to watch for a Seller’s market in 2016.
Sales - The total sales for the 12 months ending January 2016 was at 960, down 5% from the 1,013 for the 12 months ending January 2015. With the BC economy continuing to lead the country, our North Okanagan region may be poised for some stable recovery if January sales for this year are any leading indicator.
Inventory - The average monthly inventory of single family homes rose again for the second time in 5 years, a response to slowing sales. The average monthly inventory rose 2% to 555 for the last 12 months ending in January 2016 compared to 543 for the same period in 2015. Again, that can all change quickly if the trend set by January sales gathers steam.
Prices - Despite slower sales and rising inventory, prices continue to edge up and we are seeing continued upward pressure on average median prices. At $355,339, average median prices for the last 12 months ending in January 2016 rose 3.5% from 12 months ending in January 2015 and was up 8.7% 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 climb in 2016.
Absorption Rate - The rate at which our inventory is being absorbed by sales continues to fall over the short term. The average absorption rate of 14.10% over the 12 month period ending January 2016 dropped below last year’s figure of 15.17% for the fifth time this year. However, it was higher than last months 12 month average of 13.73%, another encouraging sign. Also, at the end of January 2016, the inventory dropped to where there are now only 7 months of available homes on the market, down 3 from last month. This is still considered a balanced market but moving towards a Seller’s market.
It seems that we are starting the year pretty much on a high note. With the indicators of higher sales, lower inventory AND higher prices, it is looking like 2016 could be a better year for the North Okanagan real estate market.
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 will be an interesting year to watch and I will keep you posted as it unfolds.