Tight entry-level supply driving up housing prices in Summerland
Real estate markets are heating up in the South Okanagan, but perhaps for different reasons than those in other parts of the Okanagan.
Of the 12 most expensive properties listed in the Summerland area in the past 30 days, four sold for over full price, five sold for full price and three sold for less than list price averaged only 2.9 per cent below asking price, according to Realtor Patrick Murphy of Re/Max Orchard Country Realty in Summerland.
“It’s a real positive market. There’s a lot going on, and tight supply. Prices are on the move up,” Murphy says.
The realtor says there are different ways to view the market, but he says when he looks at single family, lots and starter homes in the area “it’s a very difficult market for anyone to buy into, right across the spectrum.”
In Summerland, there isn’t much available at entry level.
“It’s such a beautiful spot to live in. A lot of people want a piece of what we’ve got. It’s a real challenge,” he says.
Murphy says it may seem counter-intuitive, but he is finding most buyers are local in Summerland.
“Most people attribute the activity to out of region buyers, but I don’t subscribe to that. I don’t see a huge amount of out of area buyers coming in and dominating our market. It’s much more locals who are trying to stay local, and that is hard,” he says. “Summerland is unique in that it doesn’t have, say a pulp mill, where people transfer in and out, and not many of those who are here want to leave. Kelowna has different forces. They have the supply, and someone from the Lower Mainland who wants to live in the Okanagan wants to go where the amenities are. Kelowna has more appeal to those people. It’s not really the Vancouver or Calgary buyer that is changing our market, it’s the first time buyer.”
Recent sales at a new development located at One Water Street in Kelowna saw 50 per cent of buyers claiming local status, with 40 per cent coming from elsewhere in British Columbia, mostly the Lower Mainland.
Condominiums starting at $300,000 are serving as vacation homes for people with high net worth who are looking for top of the line residences close to water and city amenities.
Murphy says in Summerland, there are lots of requests from people looking for a $400,000 home to buy, but they are few and far between. When they are available, they are quickly snapped up.
He says the 12 top-priced homes that sold for an average of $1.58 million each may seem high, but it’s because there weren’t eight or 10 homes priced under $500,000 available. Had they been, they would have sold as well, bringing that average price down.
“I don’t know if there is any way to fix that. There’s one house currently listed at $385,000, and I expect it to be snapped up fast. All that is left is to purchase higher end property, and that’s what shows the increased price so dramatically. It’s almost an impossibility to get into the housing market,” Murphy says.
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