Photo: CTV
The housing market in the Okanagan Valley is good right now, but it may actually be “too good,” and that’s causing headaches for buyers, sellers and realtors alike.
These days, homes in the Okanagan are selling faster than ever, and for more than they ever have, but Okanagan realtor Bill Hubbard says those extreme trends have lead to trouble in other parts of the market.
Hubbard explains that, in a good market, the time it takes for homes to sell will slowly go down, as the total number of homes for sale drops. Meanwhile, the number of sales and price of homes rises.
“The interesting thing about what’s going on now is we’ve got rising absorption (meaning homes are selling faster and faster), falling inventory (less total homes for sale), increasing prices and falling sales—which is an anomaly, it’s really strange.”
Hubbard says this is happening because there are so many people looking to buy homes, and so few homes on the market, that nearly 50 per cent of sellers are fielding multiple offers.
“There’s just not enough inventory to sell. There’s just way too many buyers going after the same houses,” he explains.
With nearly half of every home sold going only to the highest bidder, several others who were hoping to buy a home aren’t able to. This means sales are actually dropping in a market that keeps getting “better.”
According to the Okanagan Mainline Real Estate Board, 20 per cent fewer residential homes sold in the Central Okanagan by the end of July this year, compared to the same time period in 2016.
In the North Okanagan, 10 per cent fewer sold over the same time period in 2016.
As Hubbard points out, sellers aren’t putting their homes on the market because there’s nothing to buy, and there’s nothing to buy because sellers aren’t putting their homes on the market.
Meanwhile, the number of people looking to buy homes in the Okanagan continues to swell, as interest in the area from Vancouver and Alberta increases.
“It’s kind of comical…I’ve never seen it like this,” he says.
The strange market conditions have lead some to speculate the market is about to go bust, but Hubbard says he doesn’t think that’s the case.
Housing markets bottom out when people don’t want to buy homes anymore, and there are still way too many people looking to buy in the Okanagan for that to happen any time soon.
“I’m not an optimist as far as the market is concerned, and I’m not a pessimist, I’m a realist that looks at the statistics, and there’s nothing in the statistics right now that says it’s not going to become more of a seller’s market,” he says.
Hubbard guesses things in the Okanagan won’t start to normalize until at least the spring of next year.
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