While some other cities in B.C. have experienced a bit of a downturn in real estate sales in recent weeks, May statistics show the Kamloops market remains hot.
Realtors with the Kamloops and District Real Estate Association are predicting it will remain firmly a sellers’ market for the rest of 2021.
KADREA president Chelsea Mann said there are still some indications the local market is trying to find a balance, but the Tournament Capital has a long way to go before that actually happens.
“Kamloops is holding up where other markets are seeing a little bit of a decline in the sales,” Mann said. “Although our sales numbers haven’t dropped, we have been feeling on the ground a slight shift. I’m calling it a relaxation. … It’s kind of like when you’re driving, and you take our foot off the gas, but you don’t press the brake. It’s sort of that same feeling.”
In the Kamloops region, a total of 388 residential unit sales were recorded in May 2021, compared with 326 in May 2019.
Statistics from KADREA show there were 513 new listings in May, with 724 active listings in the Kamloops area as of June 3.
“We’re about 1,100 listings shy of a balanced market, so that’s going to take a long time to get back, because it’s a slow process,” Mann said. “I think that basically, the trends of sales being high and listings being low is going to continue on throughout the rest of this year.”
Aaron Krausert, a realtor and director with KADREA, said Kamloops will still be “firmly in a sellers’ market” unless there is an increase in listings.
“The market isn’t cooling yet,” Krausert said.
He said the average price for a single family home climbed to $670,000 in May in comparison to $656,000 in April.
However, Krausert said he has noticed fewer multiple offers on homes.
“January until April, there were tons and tons of multiple offers. Now some deals are coming together with just one offer in place, and some sales are actually going under asking price,” he said.
“We do see multiple offers still, but what I’ve noticed is less offers, where we used to see eight, nine, 10 offers on a home, maybe we’re seeing two or three a lot more often.”
As of June 1, the government increased the threshold for the mortgage stress test, which Krausert said may have an impact moving forward into the summer.
Now, the minimum rate for uninsured mortgages is the mortgage rate plus two per cent, or 5.25%, whichever is higher.
“We’re going to see more pressure on lower prices than where we’ve been for the last six months,” Krausert said.
“When they’ve increased the qualifying, you’re going to be affording slightly less. … So someone who has $400,000, they could buy an entry level home. But if that’s $370,000, you’re kind of now townhouse, half-duplex, for sure. So it just is going to affect some of that buying power.”
Mann said the best advice she has in regards to the new stress test threshold is for buyers to speak with their mortgage brokers.
“They’re going to be the key to telling them exactly what they can afford, if anything has changed at all for them,” Mann said.
“It’s a lot scarier sounding than the reality. We haven’t really seen much effect of this on the buying power of most people.”
Mann said the stress test was actually higher pre-pandemic than it is currently.
“Interest rates went down so low that they had to level that out a little bit,” she said. “Now, as interest rates are chipping up a little bit, that’s why it’s coming back up to the 5.25 per cent that it’s at now.”
As the province begins to re-open, many are looking to see what the resulting impact will be on the real estate market.
“Coming into the summer, we always seem to get a little bit busier. And with the restrictions easing up, I could see that continuing on, so I do think we’re going to have a really strong market throughout the rest of the year,” Mann said.
Krausert said how the coming months look in Kamloops real estate could have a lot to do with the vaccination effort.
“We’re thinking that now people are getting the shot, people are being more comfortable. A lot of those listings that didn’t come on the market are going to come on, but it hasn’t happened yet,” Krausert said.
“So will that happen over the summer as more people get the shot, and they’re more comfortable with having strangers coming through their house? Maybe. A lot of buyers are hoping so but we just haven’t seen that yet.”
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