Another month of rising sales and tightening inventory confirms that we are in the strongest spring market since 2008. The BIG news this month is that average median prices are up to the peak levels of 2008. Where will they go from here and how fast? Sales of single family homes in March this year are up 60% over March last year and continues to outperform sales since 2008 and the number of sales is fast closing in on the peak numbers of 2007/08! Now, with just 5 months of inventory on the market, March inventory has not been this low since 2007 when we experienced our strongest real estate market in history. An early look at April shows that month-to-date sales are 125% over last year. The Sellers’ market has gained momentum.
Sales - The total sales for the 12 months ending March 2016 was at 1,028, up 3.5% from the 993 for the 12 months ending March 2015. Year-to-date sales for 2016 remain strong with a 65% increase over last year. The 12 month average for 2016 has now outpaced 2015 as I predicted it would last month.
Inventory - The 12 month average monthly inventory of single family homes is still slightly higher than last year, something that the strengthening April sales will eliminate quickly. The 12 month average monthly inventory rose 2.5% to 549 for the last 12 months ending in March 2016 compared to 536 for the same period in 2015. Again, we will likely see that reverse as we continue to see strong sales in this spring market. The tightening inventory is pushing us further towards higher prices and a strong market for Sellers.
Prices - The BIG news this month is that prices have returned to the peak levels of 2008! At $361,854, average median prices for the last 12 months ending in March 2016 rose 5% from 12 months ending in March 2015 just one year ago. Average median prices are up 11.2% from 2012/13 the lowest average median price of the last 9 years. This is just $384 (one tenth of 1 percent) off of the peak prices of 2008. With prices back to those those peak levels, where will they go from here and how fast?
Absorption Rate - The rate at which our inventory is being absorbed by sales has returned to an upward trend. The average absorption rate of 15.44% over the 12 month period ending March 2016 is up from the 14.97% for the same period last year. However, looking at March 2016 absorption we can see that it is almost double last March. Also, at the end of March 2016, there were only 5 months of available homes on the market, down one from last month. That is the lowest March inventory since 2007 and confirming our move towards a solid Seller’s market.
The spring market continues on a high note. With the indicators of higher sales, lower inventory AND higher prices, it is looking like 2016 is already a good year for Sellers in the North Okanagan real estate market. Buyers will have to be sharp and ready to move or risk losing out to the ever increasing number of new Buyers entering our market.
For Buyers and Sellers it still 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 any market.