Local Community Advertising
Hardly anyone bought homes last month in Kelowna.
First of all, January is perennially a dreary time to buy a house, but this January is also plagued with a continued significant slowdown in sales and prices as potential buyers wait and see where the spiralling market will bottom out.
In Kelowna last month, only 63 single-family homes in the city changed hands, a 60% decrease from the 157 sales in January 2022 when the market was hot.
The benchmark selling price of a typical single-family home was $976,800, which is a plunge of $155,000 from the record-high of $1,131,800 in April 2022.
When it comes to townhouses, there were only 36 sales, a 46% plummet from January 2022, and the benchmark selling price was $741,600, an $88,400 difference from the peak of $829,000 in May 2022.
There were 52 condominium sales last month, a number half of what it was in January 2022.
The benchmark selling price of a condo in January was $492,900, well off from the $557,000 record-high in April 2022.
"There's no sugarcoating it, January was SLOW," said ReMax Kelowna realtor Colin Krieg.
"From a sales perspective, this was the second slowest month we have on record (back to 1991)."
In fact, only 9% of the single-family homes listed for sale in January sold, 16% of townhomes and 12% of condos.
In March 2021, when the market was at its most frenzied, almost everything for sale sold within a month of it being listed.
The current situation may get worse, according to Krieg, if people that pulled their homes off the market for the winter relist in the spring and flood the market with properties that take months and months to sell at below list price.
Anyone who owns a home, even if they aren't thinking of selling, doesn't like to see sales and prices in freefall because it means equity in their home has simply evaporated.
While sales are down significantly, prices haven't followed as far down.
That means many potential buyers still don't find Kelowna affordable or accurately priced.
For instance, the new lower prices stated above still aren't low enough to get many potential buyers to pull the trigger.
The few that do buy are able to take their time shopping around and negotiate a lower price.
Essentially, most potential buyers considered the high prices and brisk sales of early last year overheated and they are waiting for things to cool down even more to see where the bottom might be.
"This dampening in sales activity is not unexpected given current market conditions," said Lyndi Cruickshank, president of the 2,600-member Association of Interior Realtors.
"Specifically, the cost of borrowing has risen over the course of the year and weighs heavily on homebuyers' plans. Demand is strong, but high interest rates will likely continue to make for a slow first quarter in real estate activity."
Precisely, even if prices are down, higher mortgage interest rates make buying a home just as expensive, or more expensive, for many potential buyers compared to the peak of the market early last year.
"There is still a lack of affordable housing, which is compounded by the high interest rates," continued Cruickshank.
"We are seeing buyers and sellers holding off on their real estate intentions as their money just doesn't get them as far as what it used to."
Local Community Advertising