iN VIDEO: Worst real estate sales in a decade in Okanagan, Kamloops
High interest rates soured the 2023 real estate market in Kamloops in the Okanagan.
For people trying to sell their homes it was mostly a struggle to find willing buyers as the number of sales for the year were at a 10-year low in the Central Okanagan and an eight-year low in Kamloops.
But prices for single-family houses are around double what they were in 2014, even if they are significantly lower than the peaks of 2021.
“Prices didn’t go down relative to the interest rate increases,” Scott McDowell, a Royal LePage realtor in Kamloops said in his latest YouTube video called ‘Kamloops Home Sales at 8-Year Low.’
“Theoretically, for every half-point increase you see a 6% - 7% decrease on what a potential buyer can afford on any given mortgage,” he said. “We definitely didn’t see those drops in values. . . because, I think, there is still a lot of demand in the market, not only in Kamloops but across Canada. We have a lot of immigration. We have a lot of people moving into the area, a lot of investment. So I don’t think we’ll see the dramatic drop in prices that everybody was hoping for.”
There were 2,403 homes sold in Kamloops last year, down from the peak of 4,132 in 2021 and the lowest since 2,782 were sold in 2015, his video shows.
In terms of prices, the median price of units sold dropped from $595,000 last year to $568,900 this year. But 10 years ago, in 2014, that median price was almost half as much at $304,950.
Similarly in the Central Okanagan, the median single-family house price fell from more than $1 million in 2022 to $910,000 last year, according to the Kelowna Rennie Advance publication.
Back in 2014, single-family houses were selling for just over $400,000.
Sales last year of 3,795 units were down 17% from 2022 and 26% below the 10-year average, hitting their lowest numbers since 2013, the report says.
“Many buyers are going to be very glad to see prices are depressed,” Kelowna Re/Max realtor Colin Krieg told iNFOnews.ca. “At the same time, if it is the right property and it is priced right, we still get action. I had multiple offers on a townhouse last month. One offer actually went over asking. That’s unheard of right now. In the right situation and the right conditions, it can happen.”
McDowell had a similar experience over Christmas when he got three offers on a house in the Aberdeen area of Kamloops, simply because there was nothing else in that price range in that area of the city at that time.
He sees a more stable market this year but there are many unknowns that could influence how things go.
“Typically, April/May kind of set the tone for the year – or that’s when markets change,” Krieg said. “I’m hopeful that sales are going to slowly start to rebound and slowly start to digest some of the built-up inventory we have now.”
April is also the time when the Bank of Canada is forecast, by some, to lower its prime interest rate slightly.
Krieg foresees a more balanced market as opposed to the current buyer’s market.
READ MORE: Kelowna outshone most of BC for new construction in 2023
“Are rates going to go down if our economy continues to stay strong?” Krieg pondered. “Economists have been wrong for the last two years. They said they’re not going to go up any higher. Well, they did.”
He doesn’t expect people will hold off once rates start dropping in the hopes of major declines.
“I try to compare it to gas prices,” Krieg said. “When gas hit $2 everybody was over the fence and jumping up and down and saying: ‘What’s going on? This is outrageous!’ Then, after awhile, you get used to it and say: ‘Maybe $1.90 is a good deal now.’
“Kind of the same thing is happening here. Interest rates have been high enough for long enough that people are starting to accept that, OK, maybe this is the new normal. So, if rates do come down, I think it will help spur some activity. But is it going to be enough to create more affordability? I’m not so sure.”
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