July 2018: Are We Headed For a Balanced Market?

 


Kelowna Real Estate News

June 2018

After the highs we experienced in the last few years, we are now seeing a shift towards a more balanced market. The current trend may be somewhat amplified by government intervention in the form of new mortgage rules, interest rate hikes and the specter of a speculation tax that could impact Kelowna and West Kelowna.
June saw a 22% increase in the inventory of homes for sale over this time last year. Inventory continues to be relatively low by historical comparison. New listings are down 5% from May and just 4% over this time last year. However, new housing units continue to come on stream, with 33 new home developments slated for the Kelowna region alone, including 18 condo, 8 townhouse, and 7 single family developments. It is very hard to predict the housing market, as nobody can predict what our government will do next.


Sales in the Single Family Dwellings (SFD) slid 228 this June, down 19% over this time last year.


Listings are up 33% for single family homes, but still almost 20% less than the 10 year average.


All types of properties are currently in a balanced market.  This is a very healthy place to be.


Although the average price is up for Condos and Townhomes.  Prices seem to be holding fairly steady at this point,

Apartment and Townhomes

Apartments and Townhomes are currently outperforming Single Family Homes as far as the list to sell ratio goes.  We will be very curious to see how this continues.

Lots

22 lots sold on MLS out of 396 available this May which makes it an 5.5% sell to inventory ratio. Lot sales are slowing, which is to be expected.

Major Cities Report

 

Victoria

Continued uncertainty brings predictable results for the Victoria real estate market.

 A total of 708 properties sold in the Victoria Real Estate Board region this June, 29.8 percent fewer than the 1,008 properties sold in June of last year. There were a total of 2,595 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of June 2018, an increase of 8.4 percent compared to the month of May and 35.5 percent more than the 1,915 active listings for sale at the end of June 2017. The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core in June 2017 was $829,600, while the benchmark value for the same home in June 2018 increased by 7.2 percent to $889,600, higher than May’s value of $878,100. “The good news is that inventory is slowly being added to the market, though we are still very far off from our ten-year average inventory level of 4,100 listings” adds President Kerr. “The slower pace of the market has created more time for buyers who may have been hesitant to jump in during the high-pressure market conditions of recent years. Homes are spending a bit longer on the market and there are fewer multiple offer situations than in the past, and if we see more listings over the next few months we may be heading back into a more balanced market situation.” The MLS® HPI benchmark value for a condominium in the Victoria Core area in June 2017 was $430,400, while the benchmark value for the same condominium in June 2018 increased by 15.4 percent to $496,500, slightly higher than May’s value of $493,900.

Vancouver

Home Seller Supply Grows as Demand Declines

With home sale activity dipping below long-term historical averages, the supply of homes for sale in Metro Vancouver* reached a three-year high in June. The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totaled 2,425 in June 2018, a 37.7 percent decline from the 3,893 sales recorded in June 2017. Last month’s sales were 28.7 percent below the 10-year June sales average.There were 5,279 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2018. This represents a 7.7 per cent decrease compared to the 5,721 homes listed in June 2017 and a 17.2 per cent decrease compared to May 2018 when 6,375 homes were listed. The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 11,947, a 40.3 per cent increase compared to June 2017 (8,515) and a 5.8 per cent increase compared to May 2018 (11,292). This is the highest this total has been since June 2015.Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months. Sales of detached homes in June 2018 reached 766, a 42 per cent decrease from the 1,320 detached sales recorded in June 2017. The benchmark price for a detached home is $1,598,200. This represents a 0.7 per cent increase from June 2017 and a 0.6 per cent decrease compared to May 2018. Sales of apartment homes reached 1,240 in June 2018, a 34.9 per cent decrease compared to the 1,905 sales in June 2017. The benchmark price for an apartment is $704,200. This represents a 17.2 per cent increase from June 2017 and a 0.4 per cent increase compared to May 2018.Attached home sales in June 2018 totalled 419, a 37.3 per cent decrease compared to the 668 sales in June 2017. The benchmark price of an attached home is $859,800. This represents a 15.3 per cent increase from June 2017 and is virtually unchanged from May 2018.

Calgary

Weak Sales Persist in Calgary and Beyond

Many Canadian energy-related municipalities within Alberta and Saskatchewan have seen housing markets struggle over the past few years, resulting in price declines.The recent mortgage rule changes and higher lending rates are factors weighing on demand and prices across some of those areas. Weak sales activity in Calgary continued into June, as residential sales for the month totaled 1,896 units. This is 11 per cent below last year and 12 per cent below long-term averages. New listings continued to rise, with further inventory gains and months of supply now at 4.7 months.High inventories in comparison to sales have generated more widespread buyers’ market conditions, causing downward pressure on prices. The city-wide benchmark price in June totaled $436,500. This is just below last month and 1.13 per cent below last year’s levels.The detached segment of the market accounts for over 60 per cent of overall sales activity and makes up over 54 per cent of the inventory, with 4,817 units as of June. While sales have fallen and inventory has been rising across most price ranges, inventory levels for homes priced under $500,000 remain well below peak levels.

Edmonton

Single Family Unit Sales Down 10.27% Relative to 2017; Average Days on Market Increasing

In the Edmonton Census Metropolitan Area (CMA) in June 2018, the all-residential average selling price was $377,880, decreasing 3.96% compared to June 2017. The average price of a single family home was $443,210, an increase of 0.19% month over month and a decrease of 2.37% year over year. Condominium average prices decreased 1.42% compared to May 2018 and decreased 8.55% relative to June 2017. Duplex/rowhouse average prices decreased 0.61% month over month and decreased 1.64% year over year. Unit sales activity for June 2018 decreased in all categories. Single family home sales decreased  10.27% year over year. Condominium sales  decreased  9.59% compared to June 2017. Overall, the all residential sales were down 5.52% compared to May 2018 and down 9.83% compared to June 2017. New listings in June 2018 decreased 11.22%, while increasing 8.10% compared to June 2017. Inventory is also still higher, with an increase of 6.40% compared to May 2018 and an increase of 15.28% compared to June 2017. The average days on market for all residential properties increased slightly for June 2018, increasing to 56 days over 53 days the previous month and year. It took a little longer for single family homes and condominiums to sell this month as well. For single family homes, it took an average of 50 days, which was an increase from 46 days month for both over month and year over year. The average days on market for condominiums was 67 days, an increase from 66 in May 2018 and from 62 days in June 2017. The only category to decrease was duplex/rowhouses, taking 57 days in June, which was down from 59 days in May 2018 and 62 days in June 2017.

Toronto

Sales Slightly Up

Greater Toronto Area REALTORS® reported 8,082 home sales through TREB’s MLS® System in June 2018 – up 2.4 per cent compared to the low June 2017 result.  After preliminary seasonal adjustment, sales were also up 17.6 per cent on a monthly basis between May 2018 and June 2018, continuing the trend of somewhat volatile month-over-month changes over the past year as home buyers reacted to various policy changes impacting the market.The average selling price edged up by two per cent on a year-over-year basis to $807,871 in June 2018.  After preliminary seasonal adjustment, the average selling price was also up by 3.3 per cent month-over-month between May 2018 and June 2018.  The MLS® Home Price Index (HPI) was down by 4.8 per cent on a year-over-year basis, but remained basically flat month-over-month.  The difference in the year-over-year rates of change between the average price and the MLS® HPI was likely due, at least in part, to a change in the mix of properties sold in June 2018 compared to June 2017, with low-rise home types accounting for a greater share of sales in June 2018.




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RE/MAX Kelowna
#100 – 1553 Harvey Av.
Kelowna, BC, V1Y 6G1