June sales dropped 12.3% over June last year similar to what happened with sales last month in May. Our local real estate market continues to see-saw it’s way to recovery. Even year to date sales continue to drop and are now down 9% from 520 last year to 464 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 about every other month since November of 2014.
Sales - The total sales for the 12 months ending June 2015 was at 975, up only 5% from the 12 months ending June 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 10% and 16%, another factor that shows a stalling recovery.
Inventory - The average monthly inventory of single family homes dropped 10.3% to 539 for the last 12 months ending in June 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 11.9% 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 $348,443, average median prices for the last 12
months ending in June 2015 edged up slightly by 1.1% from 12 months ending in June 2014 and up 6.9%
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 14.66% over the 12 month period ending June
2015, is still the highest in the last 7 years and down again from last month’s 14.96%. At the end of June
2015, we still have 6 months of inventory available on the market, the same as the last 2 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 unfolds which is
usually slightly slower, historically. 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 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
gathers momentum and brings with it more Buyers putting downward pressure on available inventory.