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Average homeowner in Kelowna lost $98 a day in equity in 2023

When you put it like this, it sounds like homeowners in Kelowna are letting money fly out the window.

Analysis by Point2Homes, the international real estate search portal, shows the owner of an average single-family home in the city lost $98 a day in equity in 2023.

The typical condominium owner saw their equity diminish by $60 a day.

There's lots of monthly analysis on the Kelowna real estate market, as well as year-end summaries, but the Point2Homes data is the first to spell it out as a daily loss.

It makes the deficits seem more insidious.

</who>The benchmark selling price of a typical single-family home in Kelowna at the end of 2023 was $966,500, down from $1,002,400 at the end of 2022, accounting for a loss in equity of $35,900 or $98 a day.

"Homeowners across the country are contemplating a distressing reality: Their hard-bought homes are currently worth less than one year ago," reads the news release from Point2Homes.

"Falling home prices may make many new owners regret their decision to finally take the plunge and buy a home a year before, when prices were still at all-time highs."

No one likes to hear that their home is worth less than it was a year ago or that their house is worth less now than they bought it.

Or, gawd forbid, you have to sell your house now for less than you bought it for.

Of course, people that have owned their homes for three years or more still have net equity in their homes, in some cases big equity, considering that the benchmark for a single-family home in Kelowna was $687,400 in August 2018 and $761,000 in December 2020.

The Point2Homes survey crunched the numbers in the 67 largest cities across Canada and found owners in 18 cities lost equity on single-family homes and owners in 26 cities experienced condo loss of value.

To put that into numbers in Kelowna, the benchmark selling price of a typical single-family home at the end of 2023 was $966,500, a 3.6% drop or $35,900 loss in equity from the $1,002,400 benchmark price at the end of 2022.

$35,900 divided by 365 days in the year turns into an equity loss of $98 a day.

The equity loss is even bigger if you consider the record-high benchmark for a single-family home in the city was $1,131,800 in April 2022.

That computes to a staggering $165,300 loss in equity in 20 months or $270 a day.

Ouch.

"It used to be that real estate was the safest investment, but 2023 broke this unwritten rule," continued the Point2Homes news release.

"Owners were cut off from building wealth for the past year."

</who>Typical condominium owners in Kelowna lost $22,000 in equity in 2023, or $60 a day.

When it comes to condo depreciation in Kelowna it's the aforementioned $60 a day based on the benchmark price for a typical condo in the city at $480,800 at the end of 2023.

That's down 4.4% or $22,000 from the end-of-2022 benchmark of $502,800.

Again, it's even more if you consider the plunge from the record-high benchmark of $557,700 in April 2022.

That works out to a significant $76,900 loss in equity in 20 months or $128 a day.

The year-over-year drop in prices in Kelowna of 3.6% for single-family homes and 4.4% for condos at first doesn't sound like a lot.

"Percentage-wise, the decreases might seem benign," the Point2Homes news release pointed out.

"But, that percentage drop translates to a more hard-hitting net amount."

The losses in equity might be short-lived.

Demand for housing is picking up and prices could start to climb again with spring around the corner, inflation easing and speculation that mortgage interest rates could start to fall in the near future.

So, this two-year period of 'equity interrupted' could come to an end.

The biggest equity loser was Kitchener with a 4.9% decrease in value of a single-family home from $806,550 at the end of 2022 to $766,700 at end of 2022.

That $39,850 deficit translates into a loss in equity of $109 a day in 2023.

While Kelowna and Kitchener and a whole bunch of other cities like Oshawa, Victoria, Niagara Falls, Oakville and Regina lost equity, a whack of other communities saw equity gains.

The biggest winner was Red Deer with a 16% escalation in single-family home price from $329,247 at the end of 2022 to $381,984 at the end of 2023.

That $52,747 gain amounts to $144 a day equity build up.

Other cities with equity gains include Kamloops, Montreal, St. John's, Halifax and Vancouver.



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