North Okanagan Real Estate Market Statistics
You can view my latest blog article on the current North Okanagan Real Estate Market Statistics by clicking here.
I maintain a rolling summary of critical statistics on real estate sales, inventory and average prices over the years. It helps my clients to keep their finger on the pulse of the real estate market in the North Okanagan. Click here to view these statistics. You can continue below for descriptions of each of these statistics and how they are affected by rising and falling market trends.
Markets move up and down depending on general economic conditions and how confident the general public is about the future of the economy. All real estate markets moves in cycles up and down. Not all real estate markets move in the same direction at the same time as each market is influenced by local conditions. In our local market this is usually roughly about 5-7 years up followed by 5-7 years down and then 5-7 years up again and so on. These statistics are used to help us track where we are in the up/down cycles. All of the statistics are published monthly and are calculated as an average of the 12 months prior to the current month. There is one graph for each of Sales, Inventory and Prices. The Sales and Inventory are combined to calculate one more statistic called the Absorption Rate. What follows is more details on how to interpret these statistics.
Anticipating Market The Direction
In a rising market Sellers have no trouble finding Buyers to buy their home, if they price their home at the upper range of fair market value because as sales are going up, the inventory is coming down and that puts upward pressure on prices…
SALES INVENTORY PRICES
In a falling market Sellers have trouble finding Buyers to buy their homes so it is even more important to price their home at the lower range of fair market value because as sales go down, the inventory goes up and that puts downward pressure on prices…
SALES INVENTORY PRICES
Residential home sales are a leading indicator of where the market is going.
Inventory levels vary according to the rate of sales.
Residential Median Prices
Median prices are referred to as a lagging indicator in that once sales volumes change (increase or decrease) then inventory levels change up or down. The amount of inventory available and the rate at which it is absorbed by Buyers in the market affects prices in the typical supply and demand fashion of any type of market.
Putting It All Together
There is a sequence by which these different statistics are affected by activity in the market place. The volume of sales impacts the inventory which then impacts the prices. Sales is said to be a leading market indicator, followed by inventory and then inventory is followed by prices which is said to be a lagging market indicator.
To use an example, if there is an increase in sales then inventory will eventually fall. The reason why inventory does not fall immediately is that when home owners see sold signs in their neighbourhood, they see that there are Buyers in the market. A rise in the market follows a slump in the market and that slower preceding market has created some pent up demand as home owners were not able to sell there homes in the prior slower market. If they have a need to sell their home then they see this as a good time to offer their home for sale and so for a short time the inventory rises slightly or stays level until more Buyers come in to the market. The decrease in inventory combined with increased sales will eventually put upward pressure on prices. As is typical of any market, when demand increases and the supply drops there is upward pressure on prices as more Buyers compete for the fewer properties available. Sellers obtain higher prices from these competing Buyers and have less competition from other Sellers.
In a falling market, a decrease in sales leads to rising inventory. The increase in inventory combined with decreased sales eventually puts downward pressure on prices. As is typical of any market, when inventory increases and the demand drops there is eventually downward pressure on prices as fewer Buyers negotiate lower prices on the large variety of properties available. Sellers have to be aggressive in setting their price to attract the few Buyers who are active in the market.
The absorption rate gives us a single number that combines 2 of the most important indicators in any real estate market... inventory and sales. The absorption rate calculation is only applied to the category of single family residential homes as that is considered by experts to be the most relevant category. The buying and selling of single family homes is also the largest category of transactions in real estate and therefore provides us with a more accurate measure of the general mood of the people that participate in this sector of the market, the general population.
In the North Okanagan, an absorption rate of 8% to 12% represents a market that is balanced between Buyers and Sellers. Anything above that is considered a market that favours people who are selling their homes and anything below is considered a market that favours people who are looking to buy a home. A Sellers' market tends to put upward pressure on prices while a Buyers' market tends to put downward pressure on prices. Click here for a detailed tracking of the Absorption Rate over the last 7 years.
Where Our Buyers Come From
Find out where Buyers in our market are coming from, the type of properties they are buying, the family dynamics of the Buyers, how they are fiancing their purchases and where they are buying. Click here to find out. To compare to previous years, you can click here for 2016, here for 2015, here for 2014, here for 2013, here for 2012 and here for 2011.
If you would like to keep right on top of the real estate market in the North Okanagan (I call it "Paradise"), please send me a note at firstname.lastname@example.org and I will send you a notification and a link via email each time I update these statistics