Gloomy real estate market hasn't stopped million dollar condo sales in Kelowna
The dramatic slowdown in the Okanagan’s real estate market doesn’t mean it’s all doom and gloom.
Just this past week, the Kreig Family at Re/Max Kelowna fielded multiple offers for a $720,000 townhome in North Glenmore. That doesn’t mean that it sold over asking price but it's unusual.
“Many times, in a market like this, people would say: ‘Well, if you already have an offer, I don’t want it that bad. I’d rather buy something else than try to compete because it just drives the price higher,’” Colin Krieg told iNFOnews.ca. “So they walk.
"But in this case they said: ‘No, we both want it so badly that we’re willing to compete with the other people for it.’ So, you can have multiple offers and not sell over asking, where, in the market we just came through, multiple offers meant $10,000 or $15,000 or $300,000 over asking.”
That kind of competition is rare and not likely to repeat itself often in the coming months but it could because the inventory of homes for sale is so low.
READ MORE: Small group of multiple homeowners control 29% of Kamloops, Kelowna markets
“Historically, December and January have the least amount of inventory and have the least amount of sales,” Krieg said. “That’s not surprising. But a lot of people couldn’t score in the fall and pulled their properties off the market so now there's even less to choose from.”
As a comparison, the last big real estate market correction was in 2008, he said. At that time there were still 1,530 properties listed for sale in the Kelowna area. Now it’s less than half that at 679.
Things may change when the Bank of Canada makes its next interest rate adjustment later this month. If there's no rate change, it may spark more interest.
“It’s like walking down a trail and the river is rising and you don’t know when it’s going to stop,” Krieg said. “It’s terrifying so you start running. Once the river peaks and it’s no longer rising, now you have some certainty and it’s not that scary anymore.”
Life continues to go on and people need to buy homes. Marriages are made or break up, people outgrow their homes or move for work, so there is still that demand out there. It’s just that many people are waiting to see what happens with interest rates before making that move or putting their homes back on the market.
And it's not that no homes are being sold.
In December, three of 47 condos that sold in the Central Okanagan went for more than $1 million, which is unusual.
One of them was a 2,500 square foot, three bedroom unit on the 14th floor of The Madison highrise in downtown Kelowna that sold for $1.6 million.
“Once you cross that $1 million mark, you’ve got some options,” Krieg said. “You can buy a really nice townhouse. You can buy a nice house too. So, to spend $1.6 million on condo, that’s a lot of money.”
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