As predicted, November sales of single family residential homes rose sharply by 33.3% (up 19 single family residential units to 76) compared to November last year (57 units) and up 8 units from last month’s 68 units. The North Okanagan real estate market had a healthy rebound after the federal election although year to date sales in the North Okanagan continue to trend down 7.9% from 973 last year to 896 this year.
Sales - The total sales for the 12 months ending November 2015 was at 944, down 7.9% from the 1025 for the 12 months ending November 2014. However, the recovering market we were seeing earlier this year may be making a come back as signaled by the rise in November sales. This is still the 2nd highest volume of sales in the last 8 years since 2007. Now that last month’s federal election is behind us, sales should continue to show increases with the support of good economic news in BC.
Inventory - The average monthly inventory of single family homes dropped by only 1% to 550 for the last 12 months ending in November 2015, the lowest average inventory we have seen in the last 8 years. Inventory has not been this low since 2007, before the start of the recession triggered by the US banking crisis. With more Buyers out there looking for reasonably priced homes Sellers can finally make that move that they have been thinking about for the last few years.
Prices - Prices continue to edge up and we are seeing continued upward pressure on average median prices. At $352,881, average median prices for the last 12 months ending in November 2015 rose 3% from 12 months ending in November 2014 and up 6.2% from 2012 when we reached the lowest average median price of the last 9 years. If more Buyers enter the market and the inventory continues to tighten, we will see more upward pressure on prices.
Absorption Rate - The rate at which our inventory is being absorbed by sales rose a healthy 27% compared to last month seriously bucking the normal downward seasonal trend. The average absorption rate of 13.94% over the 12 month period ending November 2015 dropped below last year’s figure for the third time this year. At the end of November 2015, the inventory dropped to where there are only 6 months of available homes on the market, down two from last month. This is still considered a balanced market but is moving steadily towards a Sellers market.
As predicted, the real estate market slowed down during the period leading up to the federal election then did a serious rebound right after the election. This also happened during Alberta’s provincial election in May 2015 when Edmonton real estate experienced the lowest sales in 20 years followed the next month by a rebound in sales and even rising prices. It seems clear that consumer confidence hangs in the balance during any election period.
At this point we now expect that the market over the next 6 to 18 months will be characterized by increasing sales and lower inventory moving more strongly towards a market that favours Sellers with more competition from Buyers and rising prices. Prices will rise as consumer confidence gains momentum and brings with it more Buyers putting downward pressure on available inventory.