Is the Okanagan Valley real estate market enduring a frenzy? Is relief on its way for this element of the British Columbia housing market? Will local homebuyers engage in bidding wars with out-of-province prospects? Are families looking to establish vacation properties in Okanagan? Many questions are lingering amid the current Okanagan housing boom, but first-time homebuyers only have one: Will we be able to afford a home in this red-hot market?
Across the entire western province, housing markets are experiencing a tremendous surge in sales activity and prices. As is the case throughout the whole of Canadian real estate market, it is a simple problem of shrinking supplies and soaring demand.
From Vancouver to Kamloops, prices are being driven by sluggish housing inventories and strong demand for what is left on the market. While some properties are coming online, not everyone is convinced it will be enough to feed the appetite of homebuyers desperate to acquire properties in one of the hottest markets of British Columbia.
For now, it would be prudent to comb through the recent spring trends in the Okanagan Valley real estate market.
Conditions Remain Hot in the Okanagan Real Estate Market
According to the Association of Interior REALTORS®, residential sales in the Okanagan Valley real estate market enjoyed record numbers in April, totaling 1,719 transactions.
The benchmark price across the region reported double-digit year-over-year growth for single-family houses and townhomes. However, condominium units recorded only single-digit percentage gains.
Overall, the average residential price is in line with the national average of around $700,000. At the same time a year ago, the average valuation for a home was approximately $600,000. What a difference a year can make!
But what is happening in the Okanagan Valley housing market? The primary trend in the area is supply failing to keep up with demand, a development that has become commonplace throughout the Canadian real estate market. This is evident in the listings and inventory data.
New residential listings came in at around 1,600 in April, while active listings were below 2,000. Active listings were way below the ten-year average.
The number of months of inventory was about two, which is down from more than 12 at the same time last year. This is a good measurement for housing stocks because it represents the current number of months it would take to sell present inventories at the current rate of sales activity.
“We can’t look at the data as we normally would as this time last year we were in the thick of our first lockdown due to the pandemic,” said the Association of Interior REALTORS® President Kim Heizmann in a news release.
She added that the region is facing a supply drought as “supply is still not catching up to demand.”
“Despite the supply drought the market remains strong and is starting to rationalize,” she explained. “With vaccine roll outs underway, once more and more people get vaccinated and we get some mobility and comfort back, hopefully we see more homes come on market.”
Is fresh supply coming to the housing market? According to the Canada Mortgage and Housing Corporation (CMHC), housing starts in Kelowna, one of the primary cities in Okanagan, were slower in May, coming in at 95. In May 2020, housing starts topped 150. That said, in the first five months of 2021, housing starts have risen 816, up from 767 last year.
Is the Okanagan Valley the New Draw in British Columbia Real Estate?
Suffice it to say, the Okanagan Valley real estate market has become the next big thing in the broader British Columbia housing sector. Okanagan, which encompasses Revelstoke to Eastgate Manning Park and into the South Peace River region, has quickly turned into a red-hot area of the province as homebuyers look beyond their limited options in Vancouver or Victoria. Even out-of-province homebuyers are captivated by what they see in Okanagan.
But not everybody is able to get their hands on a detached or semi-detached property. Real estate agents and industry experts are warning that there is little supply amid soaring demand. This has been the case for the last several months. However, as noted, new supply is slowly coming to market. Whether it will be enough to ease pressure remains to be seen.
For now, many local agents are working with renters from the Lower Mainland, first-time buyers from the area, and retirees from Calgary. Who will be next to call this gorgeous area of British Columbia – and the official wine country of Western Canada – home?