Royal LePage realtor Steve Wright has been in business for nearly two decades and has never seen a real estate market quite like this in the Central Okanagan.
“We’ve seen the Okanagan market… kind of goes up, comes down a little bit, levels off, you know. Six or seven years later, kind of goes up, comes down a little bit, levels off, but nothing like this,” he told Global News.
“This is this crazy.”
Monthly stats for February released by the Association of Interior Realtors (AIR) continued showing an upward trend for home prices while active listings remained in low supply.
“It’s actually kind of a sad situation because our buyers don’t have the opportunity to get in, especially the first-time homebuyers,” Wright said.
Wright said he recently sold a condo unit that had had eight offers, with the winning bid coming in 25 per cent above the asking price.
It’s a trend, he said, that’s quite common these days.
“The Lower Mainland buyers and the Ontario buyers are coming in and they’re prepared to pay $150,000 over asking price per million dollars, so if it’s a $1 million house, it’s $1.150 million, if it’s $2 million, they’re going to offer $2.3 million.”
According to AIR, the number of homes for sale is so low that this February saw a 33-per cent decrease in the number of active listings compared to this time last year,
The low supply of homes for sale makes it a competitive market for buyers.
“Buyers are standing in the wings waiting, so something pops up on MLS they’re all flocking to it,” Wright said.
“I’m hearing stories of 20, 30 offers in some places. It’s just crazy.”
The low inventory is also driving home prices up.
According to AIR, the benchmark price for a single-family home shot up by nearly 5.4 per cent from January 2022 to February 2022 and now sits at $1. 094 million.
But it’s not just single family home prices soaring, it’s also the case with townhomes and condo units.
“It filters down. First, it starts with a single family home. You can’t afford one of those, you buy a townhouse. You can’t afford a townhouse, then you buy a condo,” said Wright.
“The condo run started in about August, September of last year. That’s when we started to see it moving up and it continues to be the hot ticket right now because it’s more affordable.”
According to AIR, the benchmark price for a townhouse in the Central Okanagan in February was $739,400, an increase of six per cent from the month before, while condos jumped up even more by 6.8 per cent and sit at $550,700.
“The persistent lack of new listings coming onto market is far from adequate to meet the demand of buyers locally and those coming from other markets,” said AIR president Kim
Heizmann.
“We are seeing the mismatch of inventory versus demand taking a toll on buyers as they show signs of fatigue in having to compete in a seller’s market where lack of supply is putting upward pressure on pricing, and further on affordability.”
With demand far outweighing supply, it’s also taking fewer days to sell homes.
According to AIR, in February it took on average 38 days to sell a property compared to 46 days in January 2022 and 65 days in February 2021.