July sales were at par with July last year (1 more single family residence sold this year) and up 8 units from last month. Our North Okanagan real estate market continues to move along at about the same as last year while we are seeing some much better numbers in the Shuswap to the north and Central Okanagan to the south. Year to date sales in the North Okanagan continue to trend down now 7.2% from 624 last year to 579 this year. Now with a federal election upon us, we will likely see continued reduced activity in the real estate market.
Sales - The total sales for the 12 months ending July 2015 was at 976, up less than 1% from the 12 months ending July 2014. The recovering market continues to loose steam, although this is still the highest volume of sales in the last 7 years since 2008. This month’s increase over last year is lower than the last 2 month’s increases of 5% and 10%, another factor that shows a stalling recovery that will likely be further exacerbated by the upcoming fall election.
Inventory - The average monthly inventory of single family homes dropped 8.6% to 541 for the last 12
months ending in July 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 10.6% 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 - Prices are stagnating due to the slower sales though we are seeing continued (but weakening)
slight upward pressure on average median prices. At $348,110, average median prices for the last 12
months ending in July 2015 edged up slightly by less than 1% from 12 months ending in July 2014 and up
6.7% from 2013 when we reached the lowest average median price of the last 8 years. If more Buyers
enter the market and the inventory tightens, we will see more upward pressure on prices, otherwise
expect stagnation to continue and prices may even drop slightly.
Absorption Rate - The rate at which our inventory is being absorbed by sales dropped slightly again
compared to last month. The average absorption rate of 14.61% over the 12 month period ending July
2015, is still the highest in the last 7 years and down again slightly from last month’s 14.66%. At the end
of July 2015, we still have 6 months of inventory available on the market, the same as the last 3 prior
months. 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 summer market moves into fall
when things usually pick up again. It appears that Buyers and Sellers are hesitating with their plans . This
hesitation will likely continue well in to the fall until after the election.
At this point we still expect that the market over the next 6 to 18 months will be characterized by slightly
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 gains
momentum and brings with it more Buyers putting downward pressure on available inventory.