Kelowna home prices take another tumble

Higher interest rates and inflation continue to stifle Kelowna's housing market.

For the fourth month in a row, home prices have dropped and sales remain stagnant.

In August, the benchmark selling price of a typical single-family home in the Central Okanagan was $1,017,500, down $114,500 from the record-high $1,132,000 set in April, according to figures from the Association of Interior Realtors.

$1 million for a house is still high and is out of reach for many regular wage earners, but it does represent a cooling from the frenzy of earlier this year.

The biggest factor in the downtick is rising interest rates to try to curb runaway inflation.

The scenario makes potential home buyers and sellers uncertain, if not scared, and prompts many to take a wait-and-see stance.

With sales slowing significantly, Kelowna is now officially a buyer's market, meaning buyers have the upper hand in any transaction and can take their time looking around and negotiating lower prices.

Gone are the seller's market heyday of homes selling quickly for more than asking price as multiple bidders push up the price.

In August, the benchmark selling price of a typical townhouse in the Central Okanagan was $772,700, a slide of $57,200 from the May record of $829,000.

The benchmark price of a condominium last month in the city was $526,700, a $31,000 adjustment from the April peak of $557,700.

With 170 single-family home sales, 54 townhouses changing hands and 126 condo sales last month, overall sales volume is down about 27% compared to August 2021 when the market was brisk.

However, August's sales are up compared to July's, which were 124, 52 and 85, respectively.

It's those numbers that Association of Interior Realtors president Lyndi Cruickshank is focusing on to predict better times ahead.

"This is a welcomed optimistic sign for a potential return to a balanced market to come, sooner than anticipated," she said.

"After the unpredictable hot market through the majority of last year, it is nice to see some typical seasonal consumer behaviour returning as we head into this fall."

Part of the buying blitz and price escalations of last year and earlier this year was buyers reacting to a shortage of homes listed for sale.

There are now many more homes up for sale, meaning cooler heads can prevail.

"This could bode well for sellers and buyers who have been sidelined for much of the year," said Cruickshank.

Another barometer of the market is how many days it typically takes to sell a home.

For a single-family house that's 42 days, up from 37 in July and up 41% from last year, for a townhouse it's 57 days, up from 33 in July and for a condo 40 days, up from 36 in July.