Home buyers hit the brakes after wildfires and interest rate hike

Home sales and prices in the Okanagan slipped last month as the region dealt with the aftermath of the devastating McDougall Creek and Clifton wildfires combined with yet another bump in mortgage interest rates.

Usually in September home sales and prices spike in the Central Okanagan.

Summer is over and people start to make home buying and selling decisions as normal routines resume in the fall.

However, last month in the Central Okanagan was an anomaly.

The wildfires started Aug. 17 and caused chaos with a state of emergency, evacuation orders, neighbourhoods scorched, tourist travel ban and smoke choking the air.

Because showings and sales ground to a halt during the fires, August sales figures from the Association of Interior Realtors reflected that with 324 sales of all kinds in the Central Okanagan (single-family, townhouse and condominium), down from 374 in July.

Remember, there were 17 days of good sales in August before the fires halted everything.

However, benchmark selling prices in all categories managed to climb slightly -- to $1,068,600 for a single-family home, $786,000 for a townhouse and $525,700 for a condo.

Because sales numbers effectively lag by two weeks as most buyers have two weeks of subjects (conditions) before it's considered sold, the bulk of the negative fire-effect on sales shows up in September's figures.

That means last month's sales totalled 230, a 28% plunge from the previously mentioned 324 in August and 374 in July.

Prices also softened with the benchmark selling price of a single-family home settling at $1,006,300, a townhouse $762,100 and a condo $481,100.

The sales and price dips could be short-lived as life in the Central Okanagan has returned to more or less normal.

We'll know when the Association of Interior Realtor's summary for October comes out in the first week of November.

"Typically the fall market starts to pick up momentum in September," pointed out association president Chelsea Mann.

"However, sales activity for the month suggests that the weight of high interest rates continues to bog down both buyers and sellers. Many buyers and sellers have seemingly hit the brakes on their real estate efforts and have taken a wait-and-see approach hoping for the cost of borrowing to lighten."

Despite this scenario, 230 homes still changed hands last month, evidence that deals are being made and some buyers and sellers are motivated.

"Homes that are priced appropriately to reflect current market conditions are still being sold at an even pace," added Mann.

While sales and prices are down, Kelowna is still unaffordable for many and there's still a housing crisis with a shortage of both affordable for-purchase and rental homes.