A conditions prediction comes to fruition The Central Okanagan’s housing market tipped back into balanced territory in July as rising interest rates keep buyers on the sidelines. Slowing sales has allowed inventory to inch closer to typical levels.
Given that sales counts decreased further in July while listings further swelled, it shouldn’t come as much of a surprise that the region moved squarely back into balanced-market territory, with 6.5 months of inventory (or MOI) available in July (an MOI of less than 5 reflects a sellers’ market; 5-8 MOI reflects balanced conditions; and an MOI over 8 reflects a buyers’ market). We should note that on a home-type basis, the detached segment was the only balanced product type in July (with an MOI of 7.2), as condos and townhomes remained in sellers’ market territory (for the time being) with MOIs of 4.3 and 4.8, respectively. With the cost of borrowing increasing again in July and market conditions tilting away from sellers, the median sold price in the Central Okanagan declined 2% from June. That said, price changes reflected market conditions when considered on a home-type basis, with the median sold price of detached homes down 2% versus June (to $970,000), while condo prices were up 0.9% (to $467,500) and townhomes were 0.04% higher (to $710,000). As we move through the balance of summer and into fall, expect the current macroeconomic environment (namely interest rates, inflation, and the labour market) to continue to weigh on housing market activity in the near term, and for sales counts to remain below that of their typical seasonal levels.
last July’s historically suppressed total, it’s still 24% below the past 10- year average. Further, sales declined by 19% from June to July, right as the most recent interest rate increase was announced; typically, the seasonal pattern is a 4% decrease in sales counts between these two months. With fewer sales occurring last month, inventory was again able to expand. In fact, total listings rose by 7% in July to 2,766—notably, this is in contrast to what is a normally-stagnating supply of homes in the summer, with the typical June-to-July pattern being no change in active listings. Inventory remained below the past-decade average in July, but by just 4%, as the margin has been shrinking of late.
We noted in this space last month that the sellers’ market in Kelowna, which only began in May, was likely to be short-lived. Indeed, that prediction came to fruition in July, with market conditions in the Central Okanagan housing market tipping back into balanced territory. After consecutive interest rate increases from the Bank of Canada in June and July and inflation hovering just outside the Bank’s target range, macroeconomic factors are having an outsized influence on local housing markets and keeping more and more would-be buyers on the sidelines. Digging into the numbers, there were 423 MLS transactions in the Central Okanagan region in July. And while this may have been 39% higher than
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