Are house prices stalling in Kelowna?

Enough is enough.

Now that the average selling price of a single-family home in Kelowna is a record-high $1.13 million, some potential buyers are refusing to pay that, setting the stage for a further slowdown in sales and house prices to plateau or even dip a bit.

"Sales volume is already down 25% compared to last year and I think April will be the tell-tale," said Francis Braam, the broker and owner at Royal LePage Kelowna.

"The market is definitely moderating and changing very quickly. We might not have a price drop in April, but it could very well plateau. I'd characterize it as a nice, little soft landing."

Recent dynamics in the market prompted Royal LePage to revise its 2022 house price survey and forecast.

The report shows prices rose rapidly in January, February and March, an average of 10% in those three months compared to the same time period last year.

With the 2022 price increase predicted to be 15% that leaves only 5% price climb for the rest of the year, which could translate into tiny monthly bumps, flattening of prices or small dips some months.

In some ways, Kelowna home prices are a self-fulfilling prophecy.

As everyone chattered about how crazy-hot the housing market was the past year and a half, prices soared to record-highs and people scrambled to buy up homes at above asking price with no subjects or conditions.

"Now that everyone is talking about how prices might have peaked and there's a possible adjustment ahead, we could have the self-fulfilling prophecy of a slowdown," said Braam.

Potential home buyers are in a pyramid, explained Braam.

"Most of the potential buyers are at the base of the pyramid, the widest part. They are the most impacted by high house prices because they are looking for the most affordable homes," he said.

"Therefore, they are the first to be priced out of the market. We've already seen that in the entry-level neighbourhoods of Rutland and Glenrose where sales have slowed and there's been price adjustments."

In March, home prices in Kelowna all sat at record-highs -- $1.13 million for a typical single-family home, $758,100 for a standard townhouse and $557,000 for an average condominium.

All those prices are an average 32% more than last year, making Kelowna the site of some of the biggest price escalations in Canada.

Since fewer homes are already selling because of lack of inventory and people balking at record-high prices, the next step is prices stalling or dipping a bit.

"Our realtors are already coaching potential buyers that they don't have to necessarily offer more than asking price or go in subject free," said Braam.

"The market is transitioning from frenetic to busy."

Braam also has another analogy for the market.

"The pace has been like driving the Coquihalla Highway at 120 kph," he said.

"When the speed limit goes to 90 kph you think you've really slowed down, but you're still going 90 kph. The market is still going at 90 kph."