Record high house prices in Kelowna

Depending on how you look at it, record high house prices in Kelowna are either a blessing or a curse.

If you already own a home, its value has gone up exponentially in the past couple of years and you're richer as a result.

If you're selling your home, you'll experience an equity windfall as you're likely to quickly get multiple offers and sell over the list price.

Such cash in hand will make it possible for you to afford another home if you're staying in Kelowna or make a killing if you happen to move somewhere where homes are cheaper.

People moving from more expensive cities such as Vancouver, Victoria and Toronto see Kelowna's prices as a deal and buy into the frenzy, driving the local market even higher.

If you're a potential first-time homebuyer trying to enter this overheated market you're likely hooped.

Prices are sky high, down payment requirements are hefty and the mortgage could be crippling.

It all comes down to supply and demand.

The inventory of homes for sale in the Central Okanagan is low and demand is high from people with money clamouring to get into bigger and better homes.

The latest statistics from the Association of Interior Realtors backs all this up.

In March, the benchmark price of single-family homes sold in the Central Okanagan was a record high $829,400, up a staggering 23.4% from $672,000 in March 2020.

For a townhouse it was $541,900, up 14.6%, and for a condominium it was $425,300, a bump of 6.1%.

The association has moved to a benchmark price as a better representation of value compared to average price because benchmark reflects a dwelling with typical attributes to others in the area.

Average takes into account all sales, including multi-million homes that are atypical, and drive the average up.

If average selling price for single-family homes was used, it would be well over $900,000.

"With the economic recovery underway, low mortgage rates and the persistent pandemic effect of buyers looking for more space, it's no surprise that local real estate is seeing a boom," said association president Kim Heizmann, a realtor with Century 21 Executive Realty in Vernon.

"While the pandemic has increased demand, it also created a huge shock to the supply side of things and that will take a long time to get back to a healthy inventory level."

In March, association figures show 829 homes of all kinds (single-family, townhouses and condos) changed hands in the Central Okanagan, an astounding 150% increase from the same month last year.

"Buyers are struggling to find homes and the lack of supply is putting upward pressure on pricing," said Heizmann.