Prices for Okanagan real estate continue to fall while supply increases

“Realistic expectations” are one of the changes in the Okanagan housing market, according to the Association of Interior Realtors.

In its May release of sales figures, the association said that there were 1,662 residential unit sales from the Shuswap to the South Okanagan in May, amounting to a 3.4 per cent decrease in sales compared with the same month last year. Compared to April’s 1,226 unit sales, however, things are looking up.

“Some buyers seem to have recovered from the rate shock and re-evaluated or have adjusted their expectations of what they desire to more realistic expectations so that they can resume their real estate efforts,” said Chelsea Mann, president of the association.

2:23 Okanagan real estate feeling the impact of higher interest rates

“While this is great to see, interest rates are still top of mind for many buyers.”

That’s probably more so as of Wednesday, when the central bank raised its benchmark interest rate to 4.75 per cent, an increase of a quarter-percentage point, in its first hike since January. The policy rate, which sets the cost of borrowing in Canada, now stands at its highest level since May 2001.

Whether that will affect buyers in the days to come remains to be seen. In Central Okanagan, there were 249 single-family homes sold in May, which was a rise of 2.4 per cent from the year earlier.

The price, however, saw some downward trajectory with the price coming in 6.7 per cent lower at $1,048,900. The number of days that a single-family home is on the market has also increased to 47 this May, which is a rise of 79.8 per cent year over year.

2:49 Okanagan housing market year in review

The Shuswap also saw more sales this May, with 61 transactions amounting to an uptick of 3.4 per cent.

Like the Central Okanagan, the benchmark price was down 5.7 per cent to $712,100, while the average number of days on the market was 62, which is up 105 per cent from a year earlier.

In the North Okanagan, the volume of sales decreased the greatest, with a drop of 14 per cent to 93 sales.

The price of a home in the North Okanagan also fell to $777,600, which was down by 4.6 per cent. It took 52 days to sell a property, which is a rise of 97.5 per cent from a year earlier.

The South Okanagan saw similar trends. While the number of sales was down 10 per cent to 88, the days to sell had grown 50 per cent to 50. Prices were also 6.6 per cent to $772,200.

The total number of active listings saw an increase of 25.5 per cent of total inventory compared with May last year, with 6,767 total residential listings recorded across the association’s region.

The highest percentage increase in active listings was recorded in the North Okanagan, with a total increase of 44.8 per cent relative to the same month last year.

“The upward trajectory of new listings from just a month ago is a promising sign that inventory may be rebounding and starting to replenish at a healthier pace than before. It will be interesting to see if this momentum continues to help bring a more balanced market,” Mann said.

Pricing shifts are something that Mann indicated people may want to come to terms with.

“When looking at housing prices, especially with regards to B.C. assessment values, it is important to note that there may be a disconnect in perception when it comes to property assessed value versus actual market value,” Mann said.

“The B.C. assessment value will not always correlate with the actual market value,” Mann explained. “Those property assessed values were calculated last year, which does not necessarily reflect what is currently happening in the real estate market today.”