Kelowna's summer housing market means higher prices, lower sales

It's a bit confounding.

Summer hits in Kelowna, temperatures rise, the kids are out of school, the living is easy and we go into holiday mode.

Many people put any notion of buying or selling a home out of their mind for the season.

So, home sales slip.

Yet, despite less activity, prices continue to rise.

See, I told you it's all slightly counterintuitive.

Last month in the Central Okanagan, 456 homes of all kinds (single-family, townhouse and condominium) changed hands, according to just-released figures from the 2,600-member Association of Interior Realtors.

That's a slide from the 489 sales in May, but up from the 390 in April and 368 in March.

Seems May represented the spring bump in home sales.

This month is expected to see even softer sales compared to June as people really do the summer check-out from home buying and selling.

Yet, in June the benchmark selling prices for a typical single-family home, townhouse and condo in the city continued to climb.

For instance, last month the single-family benchmark was $1,063,800, up from $1,048,900 in May, $1,051,100 in April and $1,001,500 in March.

The same trends holds true for townhouses with last month's benchmark at $785,900, a slight rise from $767,100 in May, $717,000 in April and $703,200 in March.

When it comes to condos, the June benchmark was $533,100, up from $516,900 in May, $528,100 in April and $492,600 in March.

While prices are certainly on an upward trajectory compared to earlier this year, June's benchmarks are still well off the record highs set in the spring of 2022 -- $1,131,800 for a single-family home, $829,000 for a townhouse and $557,000 for a condo.

Current sales pace is down considerably from 957 in April 2021 when the market was booming as people went into a pandemic buying frenzy to get the home they wanted in the area they wanted, especially if they were going to be working from home.

That same spree sent prices to their peaks in early 2022.

Then, the pandemic ended, inflation skyrocketed and mortgage interest rates shot up.

Consumer confidence deflated and sales and prices dropped as everyone sobered up.

While the market has improved since its bottom in late 2022-early 2023, it is still nowhere near the boom of 2021-early 2022.

So, one could say Kelowna's market has stabilized, balanced and will now follow more sane seasonal flows.

However, down and balanced does not mean affordable.

Kelowna's prices are still out of reach for many, especially potential first-time homebuyers.

"Demand for affordable housing is at an all-time high," said Chelsea Mann, president of the Association of Interior Realtors.

"However, there is still a segment of the market that is not available to meet certain buyer's needs due to the high cost of lending, in particular affordable housing."

While buyers acted with abandon during the boom, today's buyer is cautious.

"Competitively priced homes and those in the mid-range price points are moving at a more even pace than those at the higher end," said Mann.

"The costs of carrying mortgages could impact sales activity as interest rate sensitive buyers can no longer afford what they could have a year or so ago."